UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to _________________
Commission file number 1-9143
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RODMAN & RENSHAW CAPITAL GROUP, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 36-3111956
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
233 S. Wacker Drive, Suite 4500, Chicago, IL 60606
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 312/526-2000
--------------
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(Former name, former address, and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports) and (2) has been subject to such filing requirements
for the past 90 days. YES X No
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Shares of common stock outstanding at November 1, 1996: 6,645,802
par value $.09.<PAGE>
Rodman & Renshaw Capital Group, Inc. hereby amends Item 6 of
its Form 10-Q filed on November 14, 1996 to include four additional exhibits
identified as 4.2, 4.3, 4.4 and 10.29. Item 6 as amended is set forth below:
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits - The following exhibits are
included
herein or are incorporated by reference
(4.2) Certificate of Designations
of
Rights, Privileges and
Restrictions
of Series C Non-Voting
Convertible Preferred
Stock
(4.3) Certificate of Designations
of
Rights, Privileges and
Restrictions
of Series D Non-Voting
Convertible Preferred
Stock
(4.4) Certificate of Designations
of
Rights, Privileges and
Restrictions
of Series E Non-Voting
Convertible Preferred
Stock
(10.29) Stock Purchase Agreement
dated as
of September 30, 1996 between
the
Company and Abaco Casa de
Bolsa,
S.A. de C.V., Abaco Grupo
Financiero
(b) Reports on Form 8-K
The Company filed no reports on Form 8-K during the
quarter ended September 30, 1996.
SIGNATURES
-----------
Pursuant to the requirement of Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf
by
the undersigned thereunto duly authorized.
RODMAN & RENSHAW CAPITAL GROUP, INC.
(Registrant)
Date: December 2, 1996 By:
---------------------------------
William C. Dennis, Jr.
Chief Financial Officer
Date: December 2, 1996 By:
----------------------------------
Charles W. Daggs, III
President and Chief Executive
Officer
C:\USERS\EDGAR\10Q996A.DOC
<PAGE>
CERTIFICATE OF DESIGNATIONS
OF
RIGHTS, PREFERENCES, PRIVILEGES AND
RESTRICTIONS
OF SERIES C NON-VOTING CONVERTIBLE PREFERRED
STOCK
OF
RODMAN & RENSHAW CAPITAL GROUP, INC.
a Delaware corporation
Charles W. Daggs, III and James D. Van De Graaff
certify that:
A. They are the duly elected and acting President
and Corporate Secretary,
respectively, of Rodman & Renshaw Capital Group, Inc., a
Delaware corporation
(the "Corporation").
B. Pursuant to the authority given by the
Corporation's Certificate of
Incorporation, the Board of Directors of the Corporation
has duly adopted the
following recitals and resolutions:
WHEREAS, the Certificate of Incorporation of
the Corporation provides for a
class of shares known as Preferred Stock,
consisting of five million (5,000,000)
shares issuable from time to time in one or
more series; and
WHEREAS, the Board of Directors of the
Corporation is authorized to fix by
resolution or resolutions the rights,
preferences, privileges and restrictions granted
to or imposed upon the Preferred Stock or any
series thereof; and
WHEREAS, the Board of Directors desires,
pursuant to its authority as aforesaid, to
designate fifty (50) shares of the Preferred
Stock as "Series C Non-Voting Convertible
Preferred Stock" and to fix the rights,
preferences, privileges and restrictions relating
to such series of Preferred Stock;
NOW, THEREFORE, BE IT RESOLVED, that the Board
of Directors hereby
fixes the designation and the number of shares
constituting, and the rights, preferences,
privileges and restrictions relating to, the
Series C Non-Voting Convertible
Preferred Stock:
1. Designation. This series of Preferred
Stock shall be designated "Series
C Non-Voting Convertible Preferred Stock" (the
"Series C Preferred Stock").
2. Number of Shares and Par Value. The
number of shares constituting the
Series C Preferred Stock shall be fifty (50).
Each share of the Series C Preferred Stock shall
have a par value of one cent ($.01).
3. Certain Definitions. Unless the context
otherwise requires, the terms
defined in this paragraph 3 shall have, for all
purposes of this resolution, the meanings herein
specified.
Common Stock. The term "Common Stock"
shall mean all shares now
or hereafter authorized of any class of Common
Stock of the Corporation and any other stock
of the Corporation, howsoever designated,
authorized after the Issue Date, which has the right
(subject always to prior rights of any class or
series of preferred stock) to participate in the
distribution of the assets and earnings of the
Corporation without limit as to per share amount.
Conversion Date. The term "Conversion
Date" shall have the meaning
set forth in subparagraph 6(c) below.
Conversion Price. The term "Conversion
Price" shall mean the price per
share of Common Stock used to determine the
number of shares of Common Stock deliverable
upon conversion of a share of the Series C
Preferred Stock, which price shall be determined
pursuant to subparagraph 6(b) below, subject to
adjustment in accordance with the provisions
of subparagraph 6(e) below.
Current Market Price. The term "Current
Market Price" shall have the
meaning set forth in subparagraph 6(f) below.
Dividend Payment Date. The term "Dividend
Payment Date" shall have
the meaning set forth in subparagraph 4(a)
below.
Dividend Period. The term "Dividend
Period" shall have the meaning
set forth in subparagraph 4(a) below.
Issue Date. The term "Issue Date" shall
mean the date that shares of
Series C Preferred Stock are first issued by
the Corporation.
Junior Stock. The term "Junior Stock"
shall mean, for purposes of
paragraphs 4, 5 and 8 below, the Common Stock
and any other class or series of stock of the
Corporation issued after the Issue Date not
entitled to receive any dividends in any Dividend
Period unless all dividends required to have
been paid or declared and set apart for payment
on the Series C Preferred Stock shall have been
so paid or declared and set apart for payment
and, for purposes of paragraphs 5 and 8 below,
any class or series of stock of the Corporation
issued after the Issue Date not entitled to
receive any assets upon the liquidation, dissolution
or winding up of the affairs of the Corporation
until the Series C Preferred Stock shall have
received the entire amount to which such stock
is entitled upon such liquidation, dissolution
or winding up.
Parity Stock. The term "Parity Stock"
shall mean, for purposes of
paragraphs 4, 5, 7 and 8 below, any other class
or series of stock of the Corporation issued
after the Issue Date entitled to receive
payment of dividends on a parity with the Series C
Preferred Stock and, for purposes of paragraphs
4 and 8 below, any other class or series of
stock of the Corporation issued after the Issue
Date entitled to receive assets upon the
liquidation, dissolution or winding up of the
affairs of the Corporation on a parity with the
Series C Preferred Stock.
Senior Stock. The term "Senior Stock"
shall mean, for purposes of
paragraphs 4, 5, 7 and 8 below, any class or
series of stock of the Corporation issued after
the Issue Date ranking senior to the Series C
Preferred Stock in respect of the right to receive
dividends, and, for purposes of paragraphs 4
and 8 below, any class or series of stock of the
Corporation issued after the Issue Date ranking
senior to the Series C Preferred Stock in
respect of the right to receive assets upon the
liquidation, dissolution or winding up of the
affairs of the Corporation.
Subscription Price. The term
"Subscription Price" shall mean $100,000
per share.
Subsidiary. The term "Subsidiary" shall
mean any corporation of which
shares of stock possessing at least a majority
of the general voting power in electing the board
of directors are, at the time as of which any
determination is being made, owned by the
Corporation, whether directly or indirectly
through one or more Subsidiaries.
4. Dividends.
(a) Subject to the prior preferences and
other rights of any Senior
Stock and restrictions imposed by the terms of
any indebtedness of the Corporation, the
holders of Series C Preferred Stock shall be
entitled to receive, out of funds legally available
for the purpose, cash dividends at a per annum
rate applied to the Subscription Price as
determined daily during each Dividend Period
equal to the then most recent "Prime Rate," as
published in The Wall Street Journal (or any
successor publication) as the base rate on
corporate U.S. Dollar loans posted by at least
75% of the nation's 30 largest banks (or any
publicly published comparable rate as
determined by the Board of Directors) plus two percent
per annum; such rate to change as and when such
"Prime Rate" changes and such rate to be
determined on the basis of a 365 day year and
the actual days elapsed during a Dividend
Period. Such dividends shall be cumulative
from July 1, 1996, and shall be payable in
arrears, when and as declared by the Board of
Directors, on March 31, June 30, September
30 and December 31 of each year (each such date
being herein referred to as a "Dividend
Payment Date"), commencing on September 30,
1996. The period from July 1, 1996, through
September 30, 1996, and each quarterly period
between consecutive Dividend Payment Dates
thereafter shall hereinafter be referred to as
a "Dividend Period." Each such dividend shall
be paid to the holders of record of the Series
C Preferred Stock as their names appear on the
share register of the Corporation on the
corresponding Record Date. As used above, the term
"Record Date" means, with respect to the
dividend payment on March 31, June 30,
September 30 and December 31, respectively, of
each year, the preceding March 30, June 29,
September 29 and December 30, or such other
record date designated by the Board of
Directors of the Corporation with respect to
the dividend payable on such respective Dividend
Payment Date. Dividends on account of arrears
for any past Dividend Periods may be
declared and paid at any time, without
reference to any Dividend Payment Date, to holders
of record on such date, not exceeding 50 days
preceding the payment date thereof, as may be
fixed by the Board of Directors. No dividends
shall be payable in respect of any period less
than a full Dividend Period.
(b) In the event that full cash dividends
are not paid or made
available to the holders of all outstanding
shares of Series C Preferred Stock and of any Parity
Stock, and funds available shall be
insufficient to permit payment in full in cash to all
such
holders of the preferential amounts to which
they are then entitled, the entire amount available
for payment of cash dividends shall be
distributed among the holders of the Series C Preferred
Stock and of any Parity Stock ratably in
proportion to the full amount to which they would
otherwise be respectively entitled, and any
remainder not paid in cash to the holders of the
Series C Preferred Stock shall cumulate as
provided in subparagraph 4(c) below.
(c) If, on any Dividend Payment Date, the
holders of the Series C
Preferred Stock shall not have received the
full dividends provided for in the other provisions
of this paragraph 4, then such dividends shall
cumulate, whether or not earned or declared,
with additional dividends thereon for each
succeeding full Dividend Period during which such
dividends shall remain unpaid. Unpaid
dividends for any period less than a full Dividend
Period shall cumulate on a day-to-day basis and
shall be computed on the basis of a 365 day
year.
(d) So long as any shares of Series C
Preferred Stock shall be
outstanding, the Corporation shall not declare
or pay on any Junior Stock any dividend
whatsoever, whether in cash, property or
otherwise (other than dividends payable in shares
of the class or series upon which such
dividends are declared or paid, or payable in shares of
Common Stock with respect to Junior Stock other
than Common Stock, together with cash in
lieu of fractional shares), nor shall the
Corporation make any distribution on any Junior Stock,
nor shall any monies be paid or made available
for a sinking fund for the purchase or
redemption of any Junior Stock, unless all
dividends to which the holders of Series C
Preferred Stock shall have been entitled for
all previous Dividend Periods shall have been paid
or declared and a sum of money sufficient for
the payment thereof set apart.
5. Distributions Upon Liquidation,
Dissolution or Winding Up. In the
event of any voluntary or involuntary
liquidation, dissolution or other winding up of the
affairs
of the Corporation, subject to the prior
preferences and other rights of any Senior Stock, but
before any distribution or payment shall be
made to the holders of Junior Stock, the holders
of the Series C Preferred Stock shall be
entitled to be paid the Subscription Price of all
outstanding shares of Series C Preferred Stock
as of the date of such liquidation or dissolution
or such other winding up, plus any accrued and
unpaid dividends thereon to such date, and
no more, in cash or in property taken at its
fair value as determined by the Board of Directors.
If such payment shall have been made in full to
the holders of the Series C Preferred Stock,
and if payment shall have been made in full to
the holders of any Senior Stock and Parity
Stock of all amounts to which such holders
shall be entitled, the remaining assets and funds
of the Corporation shall be distributed among
the holders of Junior Stock, according to their
respective shares and priorities. If, upon any
such liquidation, dissolution or other winding
up of the affairs of the corporation, the net
assets of the Corporation distributable among the
holders of all outstanding shares of the Series
C Preferred Stock and of any Parity Stock shall
be insufficient to permit the payment in full
to such holders of the preferential amounts to
which they are entitled, then the entire net
assets of the Corporation remaining after the
distributions to holders of any Senior Stock of
the full amounts to which they may be entitled
shall be distributed among the holders of the
Series C Preferred Stock and of any Parity Stock
ratably in proportion to the full amounts to
which they would otherwise be respectively
entitled. Neither the consolidation or merger
of the Corporation into or with another
corporation or corporations, nor the sale of
all or substantially all of the assets of the
Corporation to another corporation or
corporations shall be deemed a liquidation, dissolution
or winding up of the affairs of the corporation
within the meaning of this paragraph 5.
6. Conversion Rights. The Series C Preferred
Stock shall be convertible
into Common Stock as follows:
(a) Automatic Conversion. Each
outstanding share of Series C
Preferred Stock shall automatically be
converted, without any further act of the Corporation
or its stockholders, into fully paid and
nonassessable shares of Common Stock at the
Conversion Price then in effect, upon the
commencement of a rights offering to all
stockholders of the Corporation at a per share
cash price equal to such Conversion Price
pursuant to which the stockholders of the
Corporation (other than the holders of Series C
Preferred Stock whose rights to purchase shares
in the offering would be deemed exercised
and consummated by the conversion) could
purchase the number of shares proportional to the
number of shares issued upon conversion
("Rights Offering"). The Series C Preferred Stock
shall not otherwise be convertible.
(b) Conversion Price. Each share of
Series C Preferred Stock shall
be converted into a number of shares of Common
Stock determined by dividing (i) the sum
of (A) the Subscription Price plus (B) any
dividends on such share of Series C Preferred Stock
which such holder is entitled to receive, but
has not yet received, by (ii) the Conversion Price
in effect on the Conversion Date. The
Conversion Price at which shares of Common Stock
shall initially be issuable upon conversion of
the shares of Series C Preferred Stock shall be
determined on a floating basis and shall equal
the book value per share of Common Stock
from time to time determined in accordance with
generally accepted accounting principles from
the Corporation's financial records as at the
close of the full month immediately preceding the
Conversion Date, provided that: (i) if it is
not practicable to determine such book value on a
sufficiently timely basis to commence the
Rights Offering, then the Conversion Price shall be
so determined at the close of the full month
second preceding the Conversion Date; and (ii)
if the applicable book value per share is less
than $0.09, then the Conversion Price shall be
$.09. The determination of book value shall be
made by the independent auditors of the
Company based on a review of the financial
records of the Company but without an audit.
The Conversion Price shall be subject to
adjustment as set forth in subparagraph 6(e). No
payment or adjustment shall be made for any
dividends on the Common Stock issuable upon
such conversion.
(c) Mechanics of Conversion. Upon the
occurrence of the event
specified in subparagraph 6(a), the outstanding
shares of Series C Preferred Stock shall be
converted automatically without any further
action by the holders of such shares and whether
or not the certificates representing such
shares are surrendered to the Corporation or its
transfer agent; provided that the Corporation
shall not be obligated to issue to any such holder
certificates evidencing the shares of Common
Stock issuable upon such conversion unless
certificates evidencing the shares of Series C
Preferred Stock are either delivered to the
Corporation or any transfer agent of the
Corporation. Conversion shall be deemed to have
been effected on the date of the occurrence of the event
specified in subparagraph 6(a) and such date
is referred to herein as the "Conversion Date." Subject
to the provisions of subparagraph 6(e), as
promptly as practicable thereafter (and after surrender
of the certificate or certificates representing
shares of Series C Preferred Stock to the Corporation or
any transfer agent of the Corporation) the
Corporation shall issue and deliver to or upon the
written order of such holder a certificate or
certificates for the number of full shares of Common
Stock to which such holder is entitled and a
check or cash with respect to any fractional interest in
a share of Common Stock as provided in
subparagraph 6(d). Subject to the provisions of
subparagraph 6(e), the person in whose name the
certificate or certificates for Common Stock are to be
issued shall be deemed to have become a holder
of record of such Common Stock on the applicable
Conversion Date.
(d) Fractional Shares. No fractional
shares of Common Stock or
script shall be issued upon conversion of
shares of Series C Preferred Stock.
Instead of any fractional shares of Common
Stock which would otherwise be
issuable upon conversion of any shares of
Series C Preferred Stock, the
Corporation shall pay a cash adjustment in
respect of such fractional interest in
an amount equal to that fractional interest of
the then Current Market Price.
(e) Conversion Price Adjustments. The
Conversion Price shall be
subject to adjustment from time to time as
follows:
(i) Consolidation, Merger, Sale,
Lease or Conveyance.
In case of any consolidation with or merger of
the Corporation with or into
another corporation, or in case of any sale,
lease or conveyance to another
corporation of the assets of the Corporation as
an entirety or substantially as an
entirety, each share of Series C Preferred
Stock shall after the date of such
consolidation, merger, sale, lease or
conveyance be convertible into the number
of shares of stock or other securities or
property (including cash) to which the
Common Stock issuable (at the time of such
consolidation, merger, sale, lease
or conveyance) upon conversion of such share of
Series C Preferred Stock
would have been entitled upon such
consolidation, merger, sale, lease or
conveyance; and in any such case, if necessary,
the provisions set forth herein
with respect to the rights and interests
thereafter of the holders of the shares of
Series C Preferred stock shall be appropriately
adjusted so as to be applicable,
as nearly as may reasonably be, to any shares
of stock or other securities or
property thereafter deliverable on the
conversion of the shares of Series C
Preferred Stock.
(ii) Rounding of Calculations;
Minimum Adjustment. All
calculations under this subparagraph (e) shall
be made to the nearest cent or to
the nearest one hundredth (1/100th) of a share,
as the case may be. Any
provision of this paragraph 6 to the contrary
notwithstanding, no adjustment in
the Conversion Price shall be made if the
amount of such adjustment would be
less than $0.01, but any such amount shall be
carried forward and an adjustment
with respect thereto shall be made at the time
of and together with any
subsequent adjustment which, together with such
amount and any other amount
or amounts so carried forward, shall aggregate
$0.01 or more.
(iii) Timing of Issuance of
Additional Common Stock Upon
Certain Adjustments. In any case in which the
provisions of this
subparagraph (e) shall require that an
adjustment shall become effective
immediately after a record date for an event,
the Corporation may defer until
the occurrence of such event (A) issuing to the
holder of any share of Series C
Preferred Stock converted after such record
date and before the occurrence of
such event the additional shares of Common
Stock issuable upon such
conversion by reason of the adjustment required
by such event over and above
the shares of Common Stock issuable upon such
conversion before giving effect
to such adjustment and (B) paying to such
holder any amount of cash in lieu of
a fractional share of Common Stock pursuant to
subparagraph (d) of this
paragraph 6; provided that the Corporation upon
request shall deliver to such
holder a due bill or other appropriate
instrument evidencing such holder's right
to receive such additional shares, and such
cash, upon the occurrence of the
event requiring such adjustment.
(f) Current Market Price. The Current
Market Price at any date
shall mean, in the event the Common Stock is
publicly traded, the average of
the daily closing prices per share of Common
Stock for 30 consecutive trading
days ending no more than 15 business days
before such date (as adjusted for any
stock dividend, split, combination or
reclassification that took effect during such
30 business day period). The closing price for
each day shall be the last
reported sale price regular way or, in case no
such reported sale takes place o
such day, the average of the last closing bid
and asked prices regular way, in
either case on the principal national
securities exchange on which the Common
Stock is listed or admitted to trading, or if
not listed or admitted to trading on
any national securities exchange, the closing
sale price for such day reported by
NASDAQ, if the Common Stock is traded
over-the-counter and quoted in the
National Market System, or if the Common Stock
is so traded, but not so
quoted, the average of the closing reported bid
and asked prices of the Common
Stock as reported by NASDAQ or any comparable
system or, if the Common
Stock is not listed on NASDAQ or any comparable
system, the average of the
closing bid and asked prices as furnished by
two members of the National
Association of Securities Dealers, Inc.
selected from time to time by the
Corporation for that purpose. If the Common
Stock is not traded in such
manner that the quotations referred to above
are available for the period
required hereunder, Current Market Price per
share of Common Stock shall be
deemed to be the fair value as determined by
the Board of Directors,
irrespective of any accounting treatment.
(g) Statement Regarding Adjustments.
Whenever the Conversion
Price shall be adjusted as provided in
subparagraph 6(e), the Corporation shall
forthwith file, at the office of any transfer
agent for the Series C Preferred
Stock and at the principal office of the
Corporation, a statement showing in
detail the facts requiring such adjustment and
the Conversion Price that shall be
in effect after such adjustment, and the
Corporation shall also cause a copy of
such statement to be sent by mail, first class
postage prepaid, to each holder of
shares of Series C Preferred Stock at its
address appearing on the Corporation's
records.
(h) Costs. The Corporation shall pay all
documentary, stamp,
transfer or other transactional taxes
attributable to the issuance or delivery of
shares of Common Stock upon conversion of any
shares of Series C Preferred
Stock; provided that the Corporation shall not
be required to pay any taxes
which may be payable in respect of any transfer
involved in the issuance or
delivery of any certificate for such shares in
a name other than that of the holder
of the shares of Series C Preferred Stock in
respect of which such shares are
being issued.
(i) Reservation of Shares. The
Corporation shall reserve at all times
so long as any shares of Series C Preferred
Stock remain outstanding, free from
preemptive rights, out of its treasury stock
(if applicable) or its authorized but
unissued shares of Common Stock, or both,
solely for the purpose of effecting
the conversion of the shares of Series C
Preferred Stock, sufficient shares of
Common Stock to provide for the conversion of
all outstanding shares of Series
C Preferred Stock.
(j) Approvals. If any shares of Common
Stock to be reserved for
the purpose of conversion of shares of Series
C Preferred Stock require
registration with or approval of any
governmental authority under any federal
or state law before such shares may be validly
issued or delivered upon
conversion, then the Corporation will in good
faith and as expeditiously as
possible endeavor to secure such registration
or approval, as the case may be.
If, and so long as, any Common Stock into which
the shares of Series C
Preferred Stock are then convertible is listed
on any national securities
exchange, the Corporation will,
contemporaneously with the conversion, cause
to be listed and thereafter to keep listed on
such exchange, upon official notice
of issuance, all shares of such Common Stock
issuable upon conversion.
(k) Valid Issuance. All shares of Common
Stock which may be
issued upon conversion of the shares of Series
C Preferred Stock will upon
issuance by the Corporation be duly and validly
issued, fully paid and
nonassessable and free from all taxes, liens
and charges with respect to the
issuance thereof, and the Corporation shall
take no action which will cause a
contrary result (including without limitation,
any action which would cause the
Conversion Price to be less than the par value,
if any, of the Common Stock).
7. Voting Rights.
(a) The holders of the issued and
outstanding shares of Series C
Preferred Stock have no voting rights except as
set forth herein and as required
by law.
(b) Without the consent of the holders of
at least
(i) a majority of the shares of
Series C Preferred Stock
then outstanding, given in writing or by vote
at a meeting of holders of Series
C Preferred Stock called for such purpose, the
Corporation will not (A) increase
the authorized amount of Series C Preferred
Stock or (B) create any other class
of Parity Stock or Senior Stock or increase the
authorized amount of any such
other class; and
(ii) a majority of the shares of
Series C Preferred Stock
then outstanding, given in writing or by vote
at a meeting of holders of Series
C Preferred Stock called for such purpose, the
Corporation will not (A) other
than as set forth in (i) above, amend, alter or
repeal any provision of the
Certificate of Incorporation or this
Certificate so as to adversely affect the
rights, preferences or privileges of the Series
C Preferred Stock or (B) merge
or consolidate with or into any other person,
or sell substantially all of its assets
or business to any other person, except that
the Corporation may merge with
any person if the corporation is the entity
surviving such merger and such
merger does not adversely affect the rights,
preferences and privileges of the
Series C Preferred Stock.
8. Covenants. In addition to any other
rights provided by law, so long as
any Series C Preferred Stock is outstanding,
the Corporation, without first
obtaining the affirmative vote or written
consent of the holders of not less than
a majority of such outstanding shares of Series
C Preferred Stock, will not:
(a) amend or repeal any provision of, or
add any provision to, the
Corporation's Certificate of Incorporation or
By-Laws or to these resolutions if
such action would alter adversely or change the
preferences, rights, privileges
or powers of, or the restrictions provided for
the benefit of, any Series C
Preferred Stock, or increase or decrease the
number of shares of Series C
Preferred Stock authorized hereby;
(b) authorize or issue shares of any
class or series of stock not
expressly authorized herein having any
preference or priority as to dividends,
assets or other rights superior to or on a
parity with any such preference or
priority of the Series C Preferred Stock, or
authorize or issue shares of stock
of any class or any bonds, debentures, notes or
other obligations convertible into
or exchangeable for, or having option rights to
purchase, any shares of stock of
the Corporation having any preference or
priority as to dividends, assets or
other rights superior to or on a parity with
any such preference or priority of
the Series C Preferred Stock;
(c) reclassify any class or series of any
Junior Stock into Parity Stock
or Senior Stock or reclassify any series of
Parity Stock into Senior Stock; or
(d) pay or declare any dividend on any
Junior Stock (other than
dividends payable in shares of the class or
series upon which such dividends are
declared or paid, or payable in shares of
Common Stock with respect to Junior
Stock other than Common Stock, together with
cash in lieu of fractional shares
and dividends not in excess of dividends paid
to the Series C Preferred Stock)
while the Series C Preferred Stock remains
outstanding, or apply any of its
assets to the redemption, retirement, purchase
or acquisition, directly or
indirectly, through subsidiaries or otherwise,
of any Junior Stock, except from
employees of the Corporation upon termination
of employment or otherwise
pursuant to the terms of stock purchase or
option agreements providing for the
repurchase of, or right of first refusal with
respect to, such Junior Stock entered
into with such employees.
9. Exclusion of Other Rights. Except as may
otherwise be required by law,
the Series C Preferred Stock shall not have any
preferences or relative,
participating, optional or other special
rights, other than those specifically set
forth in this resolution (as such resolution
may be amended from time to time)
and in the Corporation's Certificate of
Incorporation. The shares of Series C
Preferred Stock shall have no preemptive or
subscription rights. The Series C
Preferred Stock shall not be subject to
redemption or the operation of a
retirement or sinking fund.
10. Headings of Subdivisions. The headings of
the various subdivisions
hereof are for convenience of reference only
and shall not affect the
interpretation of any of the provisions hereof.
11. Severability of Provisions. If any right,
preference or limitation of the
Series C Preferred Stock set forth in this
resolution (as such resolution may be
amended from time to time) is invalid, unlawful
or incapable of being enforced
by reason of any rule of law or public policy,
all other rights, preferences and
limitations set forth in this resolution (as so
amended) which can be given effect
without the invalid, unlawful or unenforceable
right, preference or limitation
shall, nevertheless, remain in full force and
effect, and no right, preference or
limitation herein set forth shall be deemed
dependent upon any other such right,
preference or limitation unless so expressed
herein.
12. Status of Reacquired Shares. Shares of
Series C Preferred Stock which
have been issued and converted or reacquired in
any manner shall (upon
compliance with any applicable provisions of
the laws of the State of Delaware)
have the status of authorized and unissued
shares of Preferred Stock issuable in
series undesignated as to series and may be
redesignated and reissued.
C. The authorized number of shares of Preferred
Stock of the Corporation is 5,000,000
and the number of shares constituting the Series C
Non-Voting Convertible Preferred Stock, consisting
of the shares authorized hereby, is 50.<PAGE>
IN WITNESS WHEREOF, the undersigned have executed
this certificate as of March 29,
1996, on behalf of the Corporation, and certify under
penalty of perjury that this is the act and deed
of the Corporation, and that the facts stated herein are
true.
By: /s/ Charles W. Daggs,III
---------------------------
Charles W. Daggs, III
President and Chief Executive Officer
By: /s/ James D. Van De Graaff
----------------------------
James D. Van De Graaff
Secretary
CERTIFICATE OF DESIGNATIONS
OF
RIGHTS, PREFERENCES, PRIVILEGES AND
RESTRICTIONS
OF SERIES D NON-VOTING CONVERTIBLE PREFERRED
STOCK
OF
RODMAN & RENSHAW CAPITAL GROUP, INC.
a Delaware corporation
Charles W. Daggs, III and Ernesto Arechavala certify
that:
A. They are the duly elected and acting President
and Corporate Secretary, respectively,
of Rodman & Renshaw Capital Group, Inc., a Delaware
corporation (the "Corporation").
B. Pursuant to the authority given by the
Corporation's Certificate of Incorporation, the
Board of Directors of the Corporation has duly adopted
the following recitals and resolutions:
WHEREAS, the Certificate of Incorporation of
the Corporation provides for a
class of shares known as Preferred Stock,
consisting of five million (5,000,000)
shares issuable from time to time in one or
more series; and
WHEREAS, the Board of Directors of the
Corporation is authorized to fix by
resolution or resolutions the rights,
preferences, privileges and restrictions
granted to or imposed upon the Preferred Stock
or any series thereof; and
WHEREAS, the Board of Directors desires,
pursuant to its authority as
aforesaid, to designate forty-five (45) shares
of the Preferred Stock as "Series
D Non-Voting Convertible Preferred Stock" and
to fix the rights, preferences,
privileges and restrictions relating to such
series of Preferred Stock;
NOW, THEREFORE, BE IT RESOLVED, that the Board
of Directors hereby
fixes the designation and the number of shares
constituting, and the rights,
preferences, privileges and restrictions
relating to, the Series D Non-Voting
Convertible Preferred Stock:
1. Designation. This series of Preferred
Stock shall be designated "Series
D Non-Voting Convertible Preferred Stock" (the
"Series D Preferred Stock").
2. Number of Shares and Par Value. The
number of shares constituting the
Series D Preferred Stock shall be forty-five
(45). Each share of the Series D
Preferred Stock shall have a par value of one
cent ($.01).
3. Certain Definitions. Unless the context
otherwise requires, the terms
defined in this paragraph 3 shall have, for all
purposes of this resolution, the
meanings herein specified.
Common Stock. The term "Common Stock"
shall mean all shares now
or hereafter authorized of any class of Common
Stock of the Corporation and
any other stock of the Corporation, howsoever
designated, authorized after the
Issue Date, which has the right (subject always
to prior rights of any class or
series of preferred stock) to participate in
the distribution of the assets and
earnings of the Corporation without limit as to
per share amount.
Conversion Date. The term "Conversion
Date" shall have the meaning
set forth in subparagraph 6(c) below.
Conversion Price. The term "Conversion
Price" shall mean the price per
share of Common Stock used to determine the
number of shares of Common
Stock deliverable upon conversion of a share of
the Series D Preferred Stock,
which price shall be determined pursuant to
subparagraph 6(b) below, subject
to adjustment in accordance with the provisions
of subparagraph 6(e) below.
Current Market Price. The term "Current
Market Price" shall have the
meaning set forth in subparagraph 6(f) below.
Dividend Payment Date. The term "Dividend
Payment Date" shall have
the meaning set forth in subparagraph 4(a)
below.
Dividend Period. The term "Dividend
Period" shall have the meaning
set forth in subparagraph 4(a) below.
Issue Date. The term "Issue Date" shall
mean the date that shares of
Series D Preferred Stock are first issued by
the Corporation.
Junior Stock. The term "Junior Stock"
shall mean, for purposes of
paragraphs 4, 5 and 8 below, the Common Stock
and any other class or series
of stock of the Corporation issued after the
Issue Date not entitled to receive any
dividends in any Dividend Period unless all
dividends required to have been paid
or declared and set apart for payment on the
Series D Preferred Stock shall have
been so paid or declared and set apart for
payment and, for purposes of
paragraphs 5 and 8 below, any class or series
of stock of the Corporation issued
after the Issue Date not entitled to receive
any assets upon the liquidation,
dissolution or winding up of the affairs of the
Corporation until the Series D
Preferred Stock shall have received the entire
amount to which such stock is
entitled upon such liquidation, dissolution or
winding up.
Parity Stock. The term "Parity Stock"
shall mean, for purposes of
paragraphs 4, 5, 7 and 8 below, any other class
or series of stock of the
Corporation issued after the Issue Date
entitled to receive payment of dividends
on a parity with the Series D Preferred Stock
and, for purposes of paragraphs
4 and 8 below, any other class or series of
stock of the Corporation issued after
the Issue Date entitled to receive assets upon
the liquidation, dissolution or
winding up of the affairs of the Corporation on
a parity with the Series D
Preferred Stock.
Senior Stock. The term "Senior Stock"
shall mean, for purposes of
paragraphs 4, 5, 7 and 8 below, any class or
series of stock of the Corporation
issued after the Issue Date ranking senior to
the Series D Preferred Stock in
respect of the right to receive dividends, and,
for purposes of paragraphs 4 and
8 below, any class or series of stock of the
Corporation issued after the Issue
Date ranking senior to the Series D Preferred
Stock in respect of the right to
receive assets upon the liquidation,
dissolution or winding up of the affairs of
the Corporation.
Subscription Price. The term
"Subscription Price" shall mean $100,000
per share.
Subsidiary. The term "Subsidiary" shall
mean any corporation of which
shares of stock possessing at least a majority
of the general voting power in
electing the board of directors are, at the
time as of which any determination is
being made, owned by the Corporation, whether
directly or indirectly through
one or more Subsidiaries.
4. Dividends.
(a) Subject to the prior preferences and
other rights of any Senior
Stock and restrictions imposed by the terms of
any indebtedness of the
Corporation, the holders of Series D Preferred
Stock shall be entitled to receive,
out of funds legally available for the purpose,
cash dividends at a per annum
rate applied to the Subscription Price as
determined daily during each Dividend
Period equal to the then most recent "Prime
Rate," as published in The Wall
Street Journal (or any successor publication)
as the base rate on corporate U.S.
Dollar loans posted by at least 75% of the
nation's 30 largest banks (or any
publicly published comparable rate as
determined by the Board of Directors)
plus two percent per annum; such rate to change
as and when such "Prime
Rate" changes and such rate to be determined on
the basis of a 365 day year and
the actual days elapsed during a Dividend
Period. Such dividends shall be
cumulative from July 1, 1996, and shall be
payable in arrears, when and as
declared by the Board of Directors, on March
31, June 30, September 30 and
December 31 of each year (each such date being
herein referred to as a
"Dividend Payment Date"), commencing on
September 30, 1996. The period
from July 1, 1996, through September 30, 1996,
and each quarterly period
between consecutive Dividend Payment Dates
thereafter shall hereinafter be
referred to as a "Dividend Period." Each such
dividend shall be paid to the
holders of record of the Series D Preferred
Stock as their names appear on the
share register of the Corporation on the
corresponding Record Date. As used
above, the term "Record Date" means, with
respect to the dividend payment on
March 31, June 30, September 30 and December
31, respectively, of each
year, the preceding March 30, June 29,
September 29 and December 30, or
such other record date designated by the Board
of Directors of the Corporation
with respect to the dividend payable on such
respective Dividend Payment Date.
Dividends on account of arrears for any past
Dividend Periods may be declared
and paid at any time, without reference to any
Dividend Payment Date, to
holders of record on such date, not exceeding
50 days preceding the payment
date thereof, as may be fixed by the Board of
Directors. No dividends shall be
payable in respect of any period less than a
full Dividend Period.
(b) In the event that full cash dividends
are not paid or made
available to the holders of all outstanding
shares of Series D Preferred Stock and
of any Parity Stock, and funds available shall
be insufficient to permit payment
in full in cash to all such holders of the
preferential amounts to which they are
then entitled, the entire amount available for
payment of cash dividends shall be
distributed among the holders of the Series D
Preferred Stock and of any Parity
Stock ratably in proportion to the full amount
to which they would otherwise be
respectively entitled, and any remainder not
paid in cash to the holders of the
Series D Preferred Stock shall cumulate as
provided in subparagraph 4(c) below.
(c) If, on any Dividend Payment Date, the
holders of the Series D
Preferred Stock shall not have received the
full dividends provided for in the
other provisions of this paragraph 4, then such
dividends shall cumulate,
whether or not earned or declared, with
additional dividends thereon for each
succeeding full Dividend Period during which
such dividends shall remain
unpaid. Unpaid dividends for any period less
than a full Dividend Period shall
cumulate on a day-to-day basis and shall be
computed on the basis of a 365 day
year.
(d) So long as any shares of Series D
Preferred Stock shall be
outstanding, the Corporation shall not declare
or pay on any Junior Stock any
dividend whatsoever, whether in cash, property
or otherwise (other than
dividends payable in shares of the class or
series upon which such dividends are
declared or paid, or payable in shares of
Common Stock with respect to Junior
Stock other than Common Stock, together with
cash in lieu of fractional shares),
nor shall the Corporation make any distribution
on any Junior Stock, nor shall
any monies be paid or made available for a
sinking fund for the purchase or
redemption of any Junior Stock, unless all
dividends to which the holders of
Series D Preferred Stock shall have been
entitled for all previous Dividend
Periods shall have been paid or declared and a
sum of money sufficient for the
payment thereof set apart.
5. Distributions Upon Liquidation,
Dissolution or Winding Up. In the
event of any voluntary or involuntary
liquidation, dissolution or other winding
up of the affairs of the Corporation, subject
to the prior preferences and other
rights of any Senior Stock, but before any
distribution or payment shall be made
to the holders of Junior Stock, the holders of
the Series D Preferred Stock shall
be entitled to be paid the Subscription Price
of all outstanding shares of Series
D Preferred Stock as of the date of such
liquidation or dissolution or such other
winding up, plus any accrued and unpaid
dividends thereon to such date, and
no more, in cash or in property taken at its
fair value as determined by the
Board of Directors. If such payment shall have
been made in full to the holders
of the Series D Preferred Stock, and if payment
shall have been made in full to
the holders of any Senior Stock and Parity
Stock of all amounts to which such
holders shall be entitled, the remaining assets
and funds of the Corporation shall
be distributed among the holders of Junior
Stock, according to their respective
shares and priorities. If, upon any such
liquidation, dissolution or other winding
up of the affairs of the corporation, the net
assets of the Corporation
distributable among the holders of all
outstanding shares of the Series D
Preferred Stock and of any Parity Stock shall
be insufficient to permit the
payment in full to such holders of the
preferential amounts to which they are
entitled, then the entire net assets of the
Corporation remaining after the
distributions to holders of any Senior Stock of
the full amounts to which they
may be entitled shall be distributed among the
holders of the Series D Preferred
Stock and of any Parity Stock ratably in
proportion to the full amounts to which
they would otherwise be respectively entitled.
Neither the consolidation or
merger of the Corporation into or with another
corporation or corporations, nor
the sale of all or substantially all of the
assets of the Corporation to another
corporation or corporations shall be deemed a
liquidation, dissolution or winding
up of the affairs of the corporation within the
meaning of this paragraph 5.
6. Conversion Rights. The Series D Preferred
Stock shall be convertible
into Common Stock as follows:
(a) Automatic Conversion. Each
outstanding share of Series D
Preferred Stock shall automatically be
converted, without any further act of the
Corporation or its stockholders, into fully
paid and nonassessable shares of
Common Stock at the Conversion Price then in
effect, upon the commencement
of a rights offering to all stockholders of the
Corporation at a per share cash
price equal to such Conversion Price pursuant
to which the stockholders of the
Corporation (other than the holders of Series
D Preferred Stock whose rights to
purchase shares in the offering would be deemed
exercised and consummated
by the conversion) could purchase the number of
shares proportional to the
number of shares issued upon conversion
("Rights Offering"). The Series D
Preferred Stock shall not otherwise be
convertible.
(b) Conversion Price. Each share of
Series D Preferred Stock shall
be converted into a number of shares of Common
Stock determined by dividing
(i) the sum of (A) the Subscription Price plus
(B) any dividends on such share
of Series D Preferred Stock which such holder
is entitled to receive, but has not
yet received, by (ii) the Conversion Price in
effect on the Conversion Date.
The Conversion Price at which shares of Common
Stock shall initially be
issuable upon conversion of the shares of
Series D Preferred Stock shall be
determined on a floating basis and shall equal
the book value per share of
Common Stock from time to time determined in
accordance with generally
accepted accounting principles from the
Corporation's financial records as at the
close of the full month immediately preceding
the Conversion Date, provided
that: (i) if it is not practicable to determine
such book value on a sufficiently
timely basis to commence the Rights Offering,
then the Conversion Price shall
be so determined at the close of the full month
second preceding the Conversion
Date; and (ii) if the applicable book value per
share is less than $0.09, then the
Conversion Price shall be $.09. The
determination of book value shall be made
by the independent auditors of the Company
based on a review of the financial
records of the Company but without an audit.
The Conversion Price shall be
subject to adjustment as set forth in
subparagraph 6(e). No payment or
adjustment shall be made for any dividends on
the Common Stock issuable upon
such conversion.
(c) Mechanics of Conversion. Upon the
occurrence of the event
specified in subparagraph 6(a), the outstanding
shares of Series D Preferred
Stock shall be converted automatically without
any further action by the holders
of such shares and whether or not the
certificates representing such shares are
surrendered to the Corporation or its transfer
agent; provided that the
Corporation shall not be obligated to issue to
any such holder certificates
evidencing the shares of Common Stock issuable
upon such conversion unless
certificates evidencing the shares of Series D
Preferred Stock are either
delivered to the Corporation or any transfer
agent of the Corporation.
Conversion shall be deemed to have been
effected on the date of the occurrence
of the event specified in subparagraph 6(a) and
such date is referred to herein
as the "Conversion Date." Subject to the
provisions of subparagraph 6(e), as
promptly as practicable thereafter (and after
surrender of the certificate or
certificates representing shares of Series D
Preferred Stock to the Corporation
or any transfer agent of the Corporation) the
Corporation shall issue and deliver
to or upon the written order of such holder a
certificate or certificates for the
number of full shares of Common Stock to which
such holder is entitled and a
check or cash with respect to any fractional
interest in a share of Common Stock
as provided in subparagraph 6(d). Subject to
the provisions of
subparagraph 6(e), the person in whose name the
certificate or certificates for
Common Stock are to be issued shall be deemed
to have become a holder of
record of such Common Stock on the applicable
Conversion Date.
(d) Fractional Shares. No fractional
shares of Common Stock or
script shall be issued upon conversion of
shares of Series D Preferred Stock.
Instead of any fractional shares of Common
Stock which would otherwise be
issuable upon conversion of any shares of
Series D Preferred Stock, the
Corporation shall pay a cash adjustment in
respect of such fractional interest in
an amount equal to that fractional interest of
the then Current Market Price.
(e) Conversion Price Adjustments. The
Conversion Price shall be
subject to adjustment from time to time as
follows:
(i) Consolidation, Merger, Sale,
Lease or Conveyance.
In case of any consolidation with or merger of
the Corporation with or into
another corporation, or in case of any sale,
lease or conveyance to another
corporation of the assets of the Corporation as
an entirety or substantially as an
entirety, each share of Series D Preferred
Stock shall after the date of such
consolidation, merger, sale, lease or
conveyance be convertible into the number
of shares of stock or other securities or
property (including cash) to which the
Common Stock issuable (at the time of such
consolidation, merger, sale, lease
or conveyance) upon conversion of such share of
Series D Preferred Stock
would have been entitled upon such
consolidation, merger, sale, lease or
conveyance; and in any such case, if necessary,
the provisions set forth herein
with respect to the rights and interests
thereafter of the holders of the shares of
Series D Preferred stock shall be appropriately
adjusted so as to be applicable,
as nearly as may reasonably be, to any shares
of stock or other securities or
property thereafter deliverable on the
conversion of the shares of Series D
Preferred Stock.
(ii) Rounding of Calculations;
Minimum Adjustment. All
calculations under this subparagraph (e) shall
be made to the nearest cent or to
the nearest one hundredth (1/100th) of a share,
as the case may be. Any
provision of this paragraph 6 to the contrary
notwithstanding, no adjustment in
the Conversion Price shall be made if the
amount of such adjustment would be
less than $0.01, but any such amount shall be
carried forward and an adjustment
with respect thereto shall be made at the time
of and together with any
subsequent adjustment which, together with such
amount and any other amount
or amounts so carried forward, shall aggregate
$0.01 or more.
(iii) Timing of Issuance of
Additional Common Stock Upon
Certain Adjustments. In any case in which the
provisions of this
subparagraph (e) shall require that an
adjustment shall become effective
immediately after a record date for an event,
the Corporation may defer until
the occurrence of such event (A) issuing to the
holder of any share of Series D
Preferred Stock converted after such record
date and before the occurrence of
such event the additional shares of Common
Stock issuable upon such
conversion by reason of the adjustment required
by such event over and above
the shares of Common Stock issuable upon such
conversion before giving effect
to such adjustment and (B) paying to such
holder any amount of cash in lieu of
a fractional share of Common Stock pursuant to
subparagraph (d) of this
paragraph 6; provided that the Corporation upon
request shall deliver to such
holder a due bill or other appropriate
instrument evidencing such holder's right
to receive such additional shares, and such
cash, upon the occurrence of the
event requiring such adjustment.
(f) Current Market Price. The Current
Market Price at any date
shall mean, in the event the Common Stock is
publicly traded, the average of
the daily closing prices per share of Common
Stock for 30 consecutive trading
days ending no more than 15 business days
before such date (as adjusted for any
stock dividend, split, combination or
reclassification that took effect during such
30 business day period). The closing price for
each day shall be the last
reported sale price regular way or, in case no
such reported sale takes place on
such day, the average of the last closing bid
and asked prices regular way, in
either case on the principal national
securities exchange on which the Common
Stock is listed or admitted to trading, or if
not listed or admitted to trading on
any national securities exchange, the closing
sale price for such day reported by
NASDAQ, if the Common Stock is traded
over-the-counter and quoted in the
National Market System, or if the Common Stock
is so traded, but not so
quoted, the average of the closing reported bid
and asked prices of the Common
Stock as reported by NASDAQ or any comparable
system or, if the Common
Stock is not listed on NASDAQ or any comparable
system, the average of the
closing bid and asked prices as furnished by
two members of the National
Association of Securities Dealers, Inc.
selected from time to time by the
Corporation for that purpose. If the Common
Stock is not traded in such
manner that the quotations referred to above
are available for the period
required hereunder, Current Market Price per
share of Common Stock shall be
deemed to be the fair value as determined by
the Board of Directors,
irrespective of any accounting treatment.
(g) Statement Regarding Adjustments.
Whenever the Conversion
Price shall be adjusted as provided in
subparagraph 6(e), the Corporation shall
forthwith file, at the office of any transfer
agent for the Series D Preferred
Stock and at the principal office of the
Corporation, a statement showing in
detail the facts requiring such adjustment and
the Conversion Price that shall be
in effect after such adjustment, and the
Corporation shall also cause a copy of
such statement to be sent by mail, first class
postage prepaid, to each holder of
shares of Series D Preferred Stock at its
address appearing on the Corporation's
records.
(h) Costs. The Corporation shall pay all
documentary, stamp,
transfer or other transactional taxes
attributable to the issuance or delivery of
shares of Common Stock upon conversion of any
shares of Series D Preferred
Stock; provided that the Corporation shall not
be required to pay any taxes
which may be payable in respect of any transfer
involved in the issuance or
delivery of any certificate for such shares in
a name other than that of the holder
of the shares of Series D Preferred Stock in
respect of which such shares are
being issued.
(i) Reservation of Shares. The
Corporation shall reserve at all times
so long as any shares of Series D Preferred
Stock remain outstanding, free from
preemptive rights, out of its treasury stock
(if applicable) or its authorized but
unissued shares of Common Stock, or both,
solely for the purpose of effecting
the conversion of the shares of Series D
Preferred Stock, sufficient shares of
Common Stock to provide for the conversion of
all outstanding shares of Series
D Preferred Stock.
(j) Approvals. If any shares of Common
Stock to be reserved for
the purpose of conversion of shares of Series
D Preferred Stock require
registration with or approval of any
governmental authority under any federal
or state law before such shares may be validly
issued or delivered upon
conversion, then the Corporation will in good
faith and as expeditiously as
possible endeavor to secure such registration
or approval, as the case may be.
If, and so long as, any Common Stock into which
the shares of Series D
Preferred Stock are then convertible is listed
on any national securities
exchange, the Corporation will,
contemporaneously with the conversion, cause
to be listed and thereafter to keep listed on
such exchange, upon official notice
of issuance, all shares of such Common Stock
issuable upon conversion.
(k) Valid Issuance. All shares of Common
Stock which may be
issued upon conversion of the shares of Series
D Preferred Stock will upon
issuance by the Corporation be duly and validly
issued, fully paid and
nonassessable and free from all taxes, liens
and charges with respect to the
issuance thereof, and the Corporation shall
take no action which will cause a
contrary result (including without limitation,
any action which would cause the
Conversion Price to be less than the par value,
if any, of the Common Stock).
7. Voting Rights.
(a) The holders of the issued and
outstanding shares of Series D
Preferred Stock have no voting rights except as
set forth herein and as required
by law.
(b) Without the consent of the holders of
at least
(i) a majority of the shares of
Series D Preferred Stock
then outstanding, given in writing or by vote
at a meeting of holders of Series
D Preferred Stock called for such purpose, the
Corporation will not (A) increase
the authorized amount of Series D Preferred
Stock or (B) create any other class
of Parity Stock or Senior Stock or increase the
authorized amount of any such
other class; and
(ii) a majority of the shares of
Series D Preferred Stock
then outstanding, given in writing or by vote
at a meeting of holders of Series
D Preferred Stock called for such purpose, the
Corporation will not (A) other
than as set forth in (i) above, amend, alter or
repeal any provision of the
Certificate of Incorporation or this
Certificate so as to adversely affect the
rights, preferences or privileges of the Series
D Preferred Stock or (B) merge
or consolidate with or into any other person,
or sell substantially all of its assets
or business to any other person, except that
the Corporation may merge with
any person if the corporation is the entity
surviving such merger and such
merger does not adversely affect the rights,
preferences and privileges of the
Series D Preferred Stock.
8. Covenants. In addition to any other
rights provided by law, so long as
any Series D Preferred Stock is outstanding,
the Corporation, without first
obtaining the affirmative vote or written
consent of the holders of not less than
a majority of such outstanding shares of Series
D Preferred Stock, will not:
(a) amend or repeal any provision of, or
add any provision to, the
Corporation's Certificate of Incorporation or
By-Laws or to these resolutions if
such action would alter adversely or change the
preferences, rights, privileges
or powers of, or the restrictions provided for
the benefit of, any Series D
Preferred Stock, or increase or decrease the
number of shares of Series D
Preferred Stock authorized hereby;
(b) authorize or issue shares of any
class or series of stock not
expressly authorized herein having any
preference or priority as to dividends,
assets or other rights superior to or on a
parity with any such preference or
priority of the Series D Preferred Stock, or
authorize or issue shares of stock
of any class or any bonds, debentures, notes or
other obligations convertible into
or exchangeable for, or having option rights to
purchase, any shares of stock of
the Corporation having any preference or
priority as to dividends, assets or
other rights superior to or on a parity with
any such preference or priority of
the Series D Preferred Stock;
(c) reclassify any class or series of any
Junior Stock into Parity Stock
or Senior Stock or reclassify any series of
Parity Stock into Senior Stock; or
(d) pay or declare any dividend on any
Junior Stock (other than
dividends payable in shares of the class or
series upon which such dividends are
declared or paid, or payable in shares of
Common Stock with respect to Junior
Stock other than Common Stock, together with
cash in lieu of fractional shares
and dividends not in excess of dividends paid
to the Series D Preferred Stock)
while the Series D Preferred Stock remains
outstanding, or apply any of its
assets to the redemption, retirement, purchase
or acquisition, directly or
indirectly, through subsidiaries or otherwise,
of any Junior Stock, except from
employees of the Corporation upon termination
of employment or otherwise
pursuant to the terms of stock purchase or
option agreements providing for the
repurchase of, or right of first refusal with
respect to, such Junior Stock entered
into with such employees.
9. Exclusion of Other Rights. Except as may
otherwise be required by law,
the Series D Preferred Stock shall not have any
preferences or relative,
participating, optional or other special
rights, other than those specifically set
forth in this resolution (as such resolution
may be amended from time to time)
and in the Corporation's Certificate of
Incorporation. The shares of Series D
Preferred Stock shall have no preemptive or
subscription rights. The Series D
Preferred Stock shall not be subject to
redemption or the operation of a
retirement or sinking fund.
10. Headings of Subdivisions. The headings of
the various subdivisions
hereof are for convenience of reference only
and shall not affect the
interpretation of any of the provisions hereof.
11. Severability of Provisions. If any right,
preference or limitation of the
Series D Preferred Stock set forth in this
resolution (as such resolution may be
amended from time to time) is invalid, unlawful
or incapable of being enforced
by reason of any rule of law or public policy,
all other rights, preferences and
limitations set forth in this resolution (as so
amended) which can be given effect
without the invalid, unlawful or unenforceable
right, preference or limitation
shall, nevertheless, remain in full force and
effect, and no right, preference or
limitation herein set forth shall be deemed
dependent upon any other such right,
preference or limitation unless so expressed
herein.
12. Status of Reacquired Shares. Shares of
Series D Preferred Stock which
have been issued and converted or reacquired in
any manner shall (upon
compliance with any applicable provisions of
the laws of the State of Delaware)
have the status of authorized and unissued
shares of Preferred Stock issuable in
series undesignated as to series and may be
redesignated and reissued.
C. The authorized number of shares of Preferred
Stock of the Corporation is 5,000,000
and the number of shares constituting the Series D
Non-Voting Convertible Preferred Stock, consisting
of the shares authorized hereby, is 45.<PAGE>
IN WITNESS WHEREOF, the undersigned have executed
this certificate as of April 30, 1996,
on behalf of the Corporation, and certify under penalty
of perjury that this is the act and deed of the
Corporation, and that the facts stated herein are true.
By: /s/ Charles W. Daggs, III
---------------------------
President and Chief Executive Officer
By: /s/ Ernesto Arechavala
------------------------
Ernesto Archavala
Secretary
CERTIFICATE OF DESIGNATIONS
OF
RIGHTS, PREFERENCES, PRIVILEGES AND
RESTRICTIONS
OF SERIES E NON-VOTING CONVERTIBLE PREFERRED
STOCK
OF
RODMAN & RENSHAW CAPITAL GROUP, INC.
a Delaware corporation
Charles W. Daggs, III and Gilbert R. Ott, Jr.
certify that:
A. They are the duly elected and acting President
and Corporate Secretary, respectively,
of Rodman & Renshaw Capital Group, Inc., a Delaware
corporation (the "Corporation").
B.
1 Pursuant to the authority given by the
Corporation's Certificate of Incorporation, the
Board of Directors of the Corporation has duly adopted
the following recitals and resolutions:
WHEREAS, the Certificate of Incorporation of
the Corporation provides for a
class of shares known as Preferred Stock,
consisting of five million (5,000,000)
shares issuable from time to time in one or
more series; and
WHEREAS, the Board of Directors of the
Corporation is authorized to fix by
resolution or resolutions the rights,
preferences, privileges and restrictions
granted to or imposed upon the Preferred Stock
or any series thereof; and
WHEREAS, the Board of Directors desires,
pursuant to its authority as
aforesaid, to designate thirty (30) shares of
the Preferred Stock as "Series E
Non-Voting Convertible Preferred Stock" and to
fix the rights, preferences,
privileges and restrictions relating to such
series of Preferred Stock;
NOW, THEREFORE, BE IT RESOLVED, that the Board
of Directors hereby
fixes the designation and the number of shares
constituting, and the rights,
preferences, privileges and restrictions
relating to, the Series E Non-Voting
Convertible Preferred Stock:
1 Designation. This series of Preferred
Stock shall be designated "Series
E Non-Voting Convertible Preferred Stock" (the
"Series E Preferred Stock").
2 Number of Shares and Par Value. The
number of shares constituting the
Series E Preferred Stock shall be thirty (30).
Each share of the Series E
Preferred Stock shall have a par value of one
cent ($.01).
3 Certain Definitions. Unless the context
otherwise requires, the terms
defined in this paragraph 3 shall have, for all
purposes of this resolution, the
meanings herein specified.
Common Stock. The term "Common Stock"
shall mean all shares now
or hereafter authorized of any class of Common
Stock of the Corporation and
any other stock of the Corporation, howsoever
designated, authorized after the
Issue Date, which has the right (subject always
to prior rights of any class or
series of preferred stock) to participate in
the distribution of the assets and
earnings of the Corporation without limit as to
per share amount.
Conversion Date. The term "Conversion
Date" shall have the meaning
set forth in subparagraph 6(d) below.
Conversion Price. The term "Conversion
Price" shall mean the price per
share of Common Stock used to determine the
number of shares of Common
Stock deliverable upon conversion of a share of
the Series E Preferred Stock,
which price shall be determined pursuant to
subparagraph 6(b) below, subject
to adjustment in accordance with the provisions
of subparagraph 6(g) below.
Current Market Price. The term "Current
Market Price" shall have the
meaning set forth in subparagraph 6(h) below.
Dividend Payment Date. The term "Dividend
Payment Date" shall have
the meaning set forth in subparagraph 4(a)
below.
Dividend Period. The term "Dividend
Period" shall have the meaning
set forth in subparagraph 4(a) below.
Issue Date. The term "Issue Date" shall
mean the date that shares of
Series E Preferred Stock are first issued by
the Corporation.
Junior Stock. The term "Junior Stock"
shall mean, for purposes of
paragraphs 4, 5 and 8 below, the Common Stock
and any other class or series
of stock of the Corporation issued after the
Issue Date not entitled to receive any
dividends in any Dividend Period unless all
dividends required to have been paid
or declared and set apart for payment on the
Series E Preferred Stock shall have
been so paid or declared and set apart for
payment and, for purposes of
paragraphs 5 and 8 below, any class or series
of stock of the Corporation issued
after the Issue Date not entitled to receive
any assets upon the liquidation,
dissolution or winding up of the affairs of the
Corporation until the Series E
Preferred Stock shall have received the entire
amount to which such stock is
entitled upon such liquidation, dissolution or
winding up.
Parity Stock. The term "Parity Stock"
shall mean, for purposes of
paragraphs 4, 5, 7 and 8 below, any other class
or series of stock of the
Corporation issued after the Issue Date
entitled to receive payment of dividends
on a parity with the Series E Preferred Stock
and, for purposes of paragraphs
4 and 8 below, any other class or series of
stock of the Corporation issued after
the Issue Date entitled to receive assets upon
the liquidation, dissolution or
winding up of the affairs of the Corporation on
a parity with the Series E
Preferred Stock.
Senior Stock. The term "Senior Stock"
shall mean, for purposes of
paragraphs 4, 5, 7 and 8 below, any class or
series of stock of the Corporation
issued after the Issue Date ranking senior to
the Series E Preferred Stock in
respect of the right to receive dividends, and,
for purposes of paragraphs 4 and
8 below, any class or series of stock of the
Corporation issued after the Issue
Date ranking senior to the Series E Preferred
Stock in respect of the right to
receive assets upon the liquidation,
dissolution or winding up of the affairs of
the Corporation.
Subscription Price. The term
"Subscription Price" shall mean $100,000
per share.
Subsidiary. The term "Subsidiary" shall
mean any corporation of which
shares of stock possessing at least a majority
of the general voting power in
electing the board of directors are, at the
time as of which any determination is
being made, owned by the Corporation, whether
directly or indirectly through
one or more Subsidiaries.
4 Dividends.
(a) Subject to the prior preferences and
other rights of any Senior
Stock and restrictions imposed by the terms of
any indebtedness of the
Corporation, the holders of Series E Preferred
Stock shall be entitled to receive,
out of funds legally available for the purpose,
cash dividends at a per annum
rate applied to the Subscription Price as
determined daily during each Dividend
Period equal to the then most recent "Prime
Rate," as published in The Wall
Street Journal (or any successor publication)
as the base rate on corporate U.S.
Dollar loans posted by at least 75% of the
nation's 30 largest banks (or any
publicly published comparable rate as
determined by the Board of Directors)
plus two percent per annum; such rate to change
as and when such "Prime
Rate" changes and such rate to be determined on
the basis of a 365 day year and
the actual days elapsed during a Dividend
Period. Such dividends shall be
cumulative from the Issue Date, and shall be
payable in arrears, when and as
declared by the Board of Directors, on March
31, June 30, September 30, and
December 31 of each year (each such date being
herein referred to as a
"Dividend Payment Date"), commencing on March
31, 1997. The period from
the Issue Date through March 31, 1997, and each
quarterly period between
consecutive Dividend Payment Dates thereafter
shall hereinafter be referred to
as a "Dividend Period." Each such dividend
shall be paid to the holders of
record of the Series E Preferred Stock as their
names appear on the share
register of the Corporation on the
corresponding Record Date. As used above,
the term "Record Date" means, with respect to
the dividend payment on March
31, June 30, September 30 and December 31,
respectively, of each year, the
preceding March 30, June 29, September 29 and
December 30, or such other
record date designated by the Board of
Directors of the Corporation with respect
to the dividend payable on such respective
Dividend Payment Date. Dividends
on account of arrears for any past Dividend
Periods may be declared and paid
at any time, without reference to any Dividend
Payment Date, to holders of
record on such date, not exceeding 50 days
preceding the payment date thereof,
as may be fixed by the Board of Directors. No
dividends shall be payable in
respect of any period less than a full Dividend
Period.
(b) In the event that full cash dividends
are not paid or made
available to the holders of all outstanding
shares of Series E Preferred Stock and
of any Parity Stock, and funds available shall
be insufficient to permit payment
in full in cash to all such holders of the
preferential amounts to which they are
then entitled, the entire amount available for
payment of cash dividends shall be
distributed among the holders of the Series E
Preferred Stock and of any Parity
Stock ratably in proportion to the full amount
to which they would otherwise be
respectively entitled, and any remainder not
paid in cash to the holders of the
Series E Preferred Stock shall cumulate as
provided in subparagraph 4(c) below.
(c) If, on any Dividend Payment Date, the
holders of the Series E
Preferred Stock shall not have received the
full dividends provided for in the
other provisions of this paragraph 4, then such
dividends shall cumulate,
whether or not earned or declared, with
additional dividends thereon for each
succeeding full Dividend Period during which
such dividends shall remain
unpaid. Unpaid dividends for any period less
than a full Dividend Period shall
cumulate on a day-to-day basis and shall be
computed on the basis of a 365 day
year.
(d) So long as any shares of Series E
Preferred Stock shall be
outstanding, the Corporation shall not declare
or pay on any Junior Stock any
dividend whatsoever, whether in cash, property
or otherwise (other than
dividends payable in shares of the class or
series upon which such dividends are
declared or paid, or payable in shares of
Common Stock with respect to Junior
Stock other than Common Stock, together with
cash in lieu of fractional shares),
nor shall the Corporation make any distribution
on any Junior Stock, nor shall
any monies be paid or made available for a
sinking fund for the purchase or
redemption of any Junior Stock, unless all
dividends to which the holders of
Series E Preferred Stock shall have been
entitled for all previous Dividend
Periods shall have been paid or declared and a
sum of money sufficient for the
payment thereof set apart.
5. Distributions Upon Liquidation,
Dissolution or Winding Up. In the
event of any voluntary or involuntary
liquidation, dissolution or other winding
up of the affairs of the Corporation, subject
to the prior preferences and other
rights of any Senior Stock, but before any
distribution or payment shall be made
to the holders of Junior Stock, the holders of
the Series E Preferred Stock shall
be entitled to be paid the Subscription Price
of all outstanding shares of Series
E Preferred Stock as of the date of such
liquidation or dissolution or such other
winding up, plus any accrued and unpaid
dividends thereon to such date, and
no more, in cash or in property taken at its
fair value as determined by the
Board of Directors. If such payment shall have
been made in full to the holders
of the Series E Preferred Stock, and if payment
shall have been made in full to
the holders of any Senior Stock and Parity
Stock of all amounts to which such
holders shall be entitled, the remaining assets
and funds of the Corporation shall
be distributed among the holders of Junior
Stock, according to their respective
shares and priorities. If, upon any such
liquidation, dissolution or other winding
up of the affairs of the Corporation, the net
assets of the Corporation
distributable among the holders of all
outstanding shares of the Series E
Preferred Stock and of any Parity Stock shall
be insufficient to permit the
payment in full to such holders of the
preferential amounts to which they are
entitled, then the entire net assets of the
Corporation remaining after the
distributions to holders of any Senior Stock of
the full amounts to which they
may be entitled shall be distributed among the
holders of the Series E Preferred
Stock and of any Parity Stock ratably in
proportion to the full amounts to which
they would otherwise be respectively entitled.
Neither the consolidation or
merger of the Corporation into or with another
corporation or corporations, nor
the sale of all or substantially all of the
assets of the Corporation to another
corporation or corporations shall be deemed a
liquidation, dissolution or winding
up of the affairs of the corporation within the
meaning of this paragraph 5.
6. Conversion Rights. The Series E Preferred
Stock shall be convertible
into Common Stock as follows:
(a) Conversion. Upon and after
satisfaction of the condition set forth
in subparagraph 6(c), if applicable, any
outstanding share of Series E Preferred
Stock may be converted, at the option of a
holder, at any time, in accordance
with subparagraphs 6(d) and 6(e), into fully
paid and nonassessable shares of
Common Stock.
(b) Conversion Price. The number of
shares of Common Stock into
which a share of Series E Preferred Stock shall
be converted shall be determined
by dividing (i) the sum of (A) the Subscription
Price plus (B) any dividends on
such share of Series E Preferred Stock which
such holder is entitled to receive,
but has not yet received, by (ii) the
Conversion Price in effect on the
Conversion Date. The Conversion Price at which
shares of Common Stock
shall initially be issuable upon conversion of
the shares of Series E Preferred
Stock shall be determined on a floating basis
and shall equal the book value per
share of Common Stock determined in accordance
with generally accepted
accounting principles from the Corporation's
financial records as at the close of
the full month immediately preceding the
Conversion Date, provided that: (i) if
it is not practicable to determine such book
value on a sufficiently timely basis,
then the Conversion Price shall be so
determined at the close of the full month
second preceding the Conversion Date; and (ii)
if the applicable book value per
share is less than $0.09, then the Conversion
Price shall be $.09. The
determination of book value shall be made by
the independent auditors of the
Company based on a review of the financial
records of the Company but without
an audit. The Conversion Price shall be
subject to adjustment as set forth in
subparagraph 6(g). No payment or adjustment
shall be made for any dividends
on the Common Stock issuable upon such
conversion.
(c) Conversion Condition. So long as
the New York Stock
Exchange stockholder approval
requirements shall be applicable,
Series E Preferred Stock shall be convertible
only to the extent that such
conversion is approved by the stockholders of
the Corporation, if so required.
No stockholder approval shall be required for
any conversion of the Series E
Preferred Stock made in connection with a
rights offering to all stockholders at
a per share cash price equal to the Conversion
Price pursuant to which the
stockholders (other than the holder of a share
of Series E Preferred Stock whose
rights to purchase shares in the offering would
be deemed exercised and
consummated by a conversion) could purchase the
number of shares proportional
to the number of shares issued upon conversion,
Rights Offering.
(d) Notice of Conversion. Before a holder
shall be entitled to convert any
share of Series E Preferred Stock into shares
of Common Stock, such holder
shall give written notice to the Corporation at
the principal corporate office of
the Corporation of the election to convert such
share of Series E Preferred
Stock pursuant to subparagraph (6)(a), shall
surrender the certificate or
certificates representing such share of Series
E Preferred Stock to be converted
to the Corporation or its transfer agent, and
shall designate in writing the name
or names in which the certificate or
certificates for shares of Common Stock are
to be issued. Such conversion shall be deemed
to have been made immediately
upon the date of surrender of a share of Series
E Preferred Stock (the
Conversion Date). As promptly as practicable
after the Conversion Date, the
Corporation shall at its expense issue and
deliver to or upon the written order
of such holder a certificate or certificates
for the number of full shares of
Common Stock to which such holder is entitled
and a check or cash with respect
to any fractional interest in a share of Common
Stock as provided in
subparagraph 6(e). The person in whose name the
certificate or certificates for
Common Stock are to be issued shall be deemed
to have become a holder of
record of such Common Stock on the applicable
Conversion Date for all
purposes. If less than the entire outstanding
portion of the certificate
representing the shares of Series E Preferred
Stock held by such holder is
converted, then the Corporation at its expense
will deliver to the holder,
together with the certificate or certificates
for such Common Stock, a
replacement certificate representing the shares
of Series E Preferred Stock not
surrendered for conversion by the holder.
(e) Fractional Shares. No fractional
shares of Common Stock or
script shall be issued upon conversion of
shares of Series E Preferred Stock.
Instead of any fractional shares of Common
Stock which would otherwise be
issuable upon conversion of any shares of
Series E Preferred Stock, the
Corporation shall pay a cash adjustment in
respect of such fractional interest in
an amount equal to that fractional interest of
the then Current Market Price.
(f) Stockholder Approval/Rights Offering.
On one or more occasions,
any holder of a share of Series E Preferred
Stock may at its election require the
Corporation (i) to call a special meeting of
its stockholders as soon as
practicable after such request to approve the
conversion of any share of Series
E Preferred Stock into shares of Common Stock
in accordance with the terms
hereof, (ii) include such approval on the
agenda of the next annual meeting of
stockholders, (iii) conduct a Rights Offering
as soon as practicable after such
request and/or in any such case to promptly
cause the shares issued upon
conversion to be listed on the NYSE. In the
case of clauses (i) or (ii) above,
a holder of Series E Preferred Stock who also
holds shares of Common Stock
shall vote and shall cause all affiliated
persons or entities to vote all shares of
the Corporation held by it or them for such
approval. In the event that any
shares of Series E Preferred Stock are
converted and clause (iii) is not elected
in connection therewith, a Rights Offering will
be made within one year after
the conversion of any share of Series E
Preferred Stock to the stockholders of
record at the time of such Rights Offering at
a price per share equal to the
Conversion Price used in such conversion.
(g) Conversion Price Adjustments. The
Conversion Price shall be
subject to adjustment from time to time as
follows:
(i) Consolidation, Merger, Sale,
Lease or Conveyance.
In case of any consolidation with or merger of
the Corporation with or into
another corporation, or in case of any sale,
lease or conveyance to another
corporation of the assets of the Corporation as
an entirety or substantially as an
entirety, each share of Series E Preferred
Stock shall after the date of such
consolidation, merger, sale, lease or
conveyance be convertible into the number
of shares of stock or other securities or
property (including cash) to which the
Common Stock issuable (at the time of such
consolidation, merger, sale, lease
or conveyance) upon conversion of such share of
Series E Preferred Stock
would have been entitled upon such
consolidation, merger, sale, lease or
conveyance; and in any such case, if necessary,
the provisions set forth herein
with respect to the rights and interests
thereafter of the holders of the shares of
Series E Preferred stock shall be appropriately
adjusted so as to be applicable,
as nearly as may reasonably be possible, to any
shares of stock or other
securities or property thereafter deliverable
on the conversion of the shares of
Series E Preferred Stock.
(ii) Rounding of Calculations;
Minimum Adjustment. All
calculations under this subparagraph (g) shall
be made to the nearest cent or to
the nearest one hundredth (1/100th) of a share,
as the case may be. Any
provision of this paragraph 6 to the contrary
notwithstanding, no adjustment in
the Conversion Price shall be made if the
amount of such adjustment would be
less than $0.01, but any such amount shall be
carried forward and an adjustment
with respect thereto shall be made at the time
of and together with any
subsequent adjustment which, together with such
amount and any other amount
or amounts so carried forward, shall aggregate
$0.01 or more.
(iii) Timing of Issuance of
Additional Common Stock Upon
Certain Adjustments. In any case in which the
provisions of this
subparagraph (g) shall require that an
adjustment shall become effective
immediately after a record date for an event,
the Corporation may defer until
the occurrence of such event (A) issuing to the
holder of any share of Series E
Preferred Stock converted after such record
date and before the occurrence of
such event the additional shares of Common
Stock issuable upon such
conversion by reason of the adjustment required
by such event over and above
the shares of Common Stock issuable upon such
conversion before giving effect
to such adjustment and (B) paying to such
holder any amount of cash in lieu of
a fractional share of Common Stock pursuant to
subparagraph (e) of this
paragraph 6; provided that the Corporation upon
request shall deliver to such
holder a due bill or other appropriate
instrument evidencing such holder's right
to receive such additional shares, and such
cash, upon the occurrence of the
event requiring such adjustment.
(h) Current Market Price. The Current
Market Price at any date
shall mean, in the event the Common Stock is
publicly traded, the average of
the daily closing prices per share of Common
Stock for 30 consecutive trading
days ending no more than 15 business days
before such date (as adjusted for any
stock dividend, split, combination or
reclassification that took effect during such
30 business day period). The closing price for
each day shall be the last
reported sale price regular way or, in case no
such reported sale takes place on
such day, the average of the last closing bid
and asked prices regular way, in
either case on the principal national
securities exchange on which the Common
Stock is listed or admitted to trading, or if
not listed or admitted to trading on
any national securities exchange, the closing
sale price for such day reported by
NASDAQ, if the Common Stock is traded
over-the-counter and quoted in the
National Market System, or if the Common Stock
is so traded, but not so
quoted, the average of the closing reported bid
and asked prices of the Common
Stock as reported by NASDAQ or any comparable
system or, if the Common
Stock is not listed on NASDAQ or any comparable
system, the average of the
closing bid and asked prices as furnished by
two members of the National
Association of Securities Dealers, Inc.
selected from time to time by the
Corporation for that purpose. If the Common
Stock is not traded in such
manner that the quotations referred to above
are available for the period
required hereunder, Current Market Price per
share of Common Stock shall be
deemed to be the fair value as determined by
the Board of Directors,
irrespective of any accounting treatment.
(i) Statement Regarding Adjustments.
Whenever the Conversion
Price shall be adjusted as provided in
subparagraph 6(g), the Corporation shall
forthwith file, at the office of any transfer
agent for the Series E Preferred Stock
and at the principal office of the Corporation,
a statement showing in detail the
facts requiring such adjustment and the
Conversion Price that shall be in effect
after such adjustment, and the Corporation
shall also cause a copy of such
statement to be sent by mail, first class
postage prepaid, to each holder of shares
of Series E Preferred Stock at its address
appearing on the Corporation's
records.
(j) Costs. The Corporation shall pay all
documentary, stamp,
transfer or other transactional taxes
attributable to the issuance or delivery of
shares of Common Stock upon conversion of any
shares of Series E Preferred
Stock; provided that the Corporation shall not
be required to pay any taxes
which may be payable in respect of any transfer
involved in the issuance or
delivery of any certificate for such shares in
a name other than that of the holder
of the shares of Series E Preferred Stock in
respect of which such shares are
being issued.
(k) Reservation of Shares. The
Corporation shall reserve at all times
so long as any shares of Series E Preferred
Stock remain outstanding, free from
preemptive rights, out of its treasury stock
(if applicable) or its authorized but
unissued shares of Common Stock, or both,
solely for the purpose of effecting
the conversion of the shares of Series E
Preferred Stock, sufficient shares of
Common Stock to provide for the conversion of
all outstanding shares of Series
E Preferred Stock.
(l) Approvals. If any shares of Common
Stock to be reserved for
the purpose of conversion of shares of Series
E Preferred Stock require
registration with or approval of any
governmental authority under any federal
or state law before such shares may be validly
issued or delivered upon
conversion, then the Corporation will in good
faith and as expeditiously as
possible endeavor to secure such registration
or approval, as the case may be.
If, and so long as, any Common Stock into which
the shares of Series E
Preferred Stock are then convertible is listed
on any national securities
exchange, the Corporation will,
contemporaneously with the conversion, cause
to be listed and thereafter to keep listed on
such exchange, upon official notice
of issuance, all shares of such Common Stock
issuable upon conversion.
(m) Valid Issuance. All shares of Common
Stock which may be
issued upon conversion of the shares of Series
E Preferred Stock will upon
issuance by the Corporation be duly and validly
issued, fully paid and
nonassessable and free from all taxes, liens
and charges with respect to the
issuance thereof, and the Corporation shall
take no action which will cause a
contrary result (including without limitation,
any action which would cause the
Conversion Price to be less than the par value,
if any, of the Common Stock).
7. Voting Rights.
(a) The holders of the issued and
outstanding shares of Series E
Preferred Stock have no voting rights except as
set forth herein and as required
by law.
(b) Without the consent of the holders of
at least
(i) a majority of the shares of
Series E Preferred Stock
then outstanding, given in writing or by vote
at a meeting of holders of Series
E Preferred Stock called for such purpose, the
Corporation will not (A) increase
the authorized amount of Series E Preferred
Stock or (B) create any other class
of Parity Stock or Senior Stock or increase the
authorized amount of any such
other class; and
(ii) a majority of the shares of
Series E Preferred Stock
then outstanding, given in writing or by vote
at a meeting of holders of Series
E Preferred Stock called for such purpose, the
Corporation will not (A) other
than as set forth in (i) above, amend, alter or
repeal any provision of the
Certificate of Incorporation or this
Certificate so as to adversely affect the
rights, preferences or privileges of the Series
E Preferred Stock or (B) merge
or consolidate with or into any other person,
or sell substantially all of its assets
or business to any other person, except that
the Corporation may merge with
any person if the Corporation is the entity
surviving such merger and such
merger does not adversely affect the rights,
preferences and privileges of the
Series E Preferred Stock.
8. Covenants. In addition to any other
rights provided by law, so long as
any Series E Preferred Stock is outstanding,
the Corporation, without first
obtaining the affirmative vote or written
consent of the holders of not less than
a majority of such outstanding shares of Series
E Preferred Stock, will not:
(a) amend or repeal any provision of, or
add any provision to, the
Corporation's Certificate of Incorporation or
By-Laws or to these resolutions if
such action would alter adversely or change the
preferences, rights, privileges
or powers of, or the restrictions provided for
the benefit of, any Series E
Preferred Stock, or increase or decrease the
number of shares of Series E
Preferred Stock authorized hereby;
(b) authorize or issue shares of any
class or series of stock not
expressly authorized herein having any
preference or priority as to dividends,
assets or other rights superior to or on a
parity with any such preference or
priority of the Series E Preferred Stock, or
authorize or issue shares of stock of
any class or any bonds, debentures, notes or
other obligations convertible into
or exchangeable for, or having option rights to
purchase, any shares of stock of
the Corporation having any preference or
priority as to dividends, assets or
other rights superior to or on a parity with
any such preference or priority of
the Series E Preferred Stock;
(c) reclassify any class or series of any
Junior Stock into Parity Stock
or Senior Stock or reclassify any series of
Parity Stock into Senior Stock; or
(d) pay or declare any dividend on any
Junior Stock (other than
dividends payable in shares of the class or
series upon which such dividends are
declared or paid, or payable in shares of
Common Stock with respect to Junior
Stock other than Common Stock, together with
cash in lieu of fractional shares
and dividends not in excess of dividends paid
to the Series E Preferred Stock)
while the Series E Preferred Stock remains
outstanding, or apply any of its
assets to the redemption, retirement, purchase
or acquisition, directly or
indirectly, through subsidiaries or otherwise,
of any Junior Stock, except from
employees of the Corporation upon termination
of employment or otherwise
pursuant to the terms of stock purchase or
option agreements providing for the
repurchase of, or right of first refusal with
respect to, such Junior Stock entered
into with such employees.
9. Exclusion of Other Rights. Except as may
otherwise be required by law,
the Series E Preferred Stock shall not have any
preferences or relative,
participating, optional or other special
rights, other than those specifically set
forth in this resolution (as such resolution
may be amended from time to time)
and in the Corporation's Certificate of
Incorporation. The shares of Series E
Preferred Stock shall have no preemptive or
subscription rights. The Series E
Preferred Stock shall not be subject to
redemption or the operation of a
retirement or sinking fund.
10. Headings of Subdivisions. The headings of
the various subdivisions
hereof are for convenience of reference only
and shall not affect the
interpretation of any of the provisions hereof.
11. Severability of Provisions. If any right,
preference or limitation of the
Series E Preferred Stock set forth in this
resolution (as such resolution may be
amended from time to time) is invalid, unlawful
or incapable of being enforced
by reason of any rule of law or public policy,
all other rights, preferences and
limitations set forth in this resolution (as so
amended) which can be given effect
without the invalid, unlawful or unenforceable
right, preference or limitation
shall, nevertheless, remain in full force and
effect, and no right, preference or
limitation herein set forth shall be deemed
dependent upon any other such right,
preference or limitation unless so expressed
herein.
12. Status of Reacquired Shares. Shares of
Series E Preferred Stock which
have been issued and converted or reacquired in
any manner shall (upon
compliance with any applicable provisions of
the laws of the State of Delaware)
have the status of authorized and unissued
shares of Preferred Stock issuable in
series undesignated as to series and may be
redesignated and reissued.
C. The authorized number of shares of Preferred
Stock of the Corporation is 5,000,000
and the number of shares constituting the Series E
Non-Voting Convertible Preferred Stock, consisting
of the shares authorized hereby, is 30.<PAGE>
IN WITNESS WHEREOF, the undersigned have executed
this certificate as of November 14,
1996, on behalf of the Corporation, and certify under
penalty of perjury that this is the act and deed
of the Corporation, and that the facts stated herein are
true.
By: /s/ Charles W. Daggs, III
---------------------------
President and Chief Executive Officer
By: /s/ Gilbert R. Ott, Jr.
-------------------------
Secretary
STOCK PURCHASE AGREEMENT
This Agreement is entered into as of the 30th day of
September, 1996 by and between Rodman & Renshaw Capital
Group, Inc., a Delaware corporation (the "Company"
), and Abaco Casa de Bolsa, S.A. de C.V., Abaco Grupo
Financiero, a corporation incorporated under the laws of the
United Mexican States ("Abaco").
RECITALS
WHEREAS, Abaco owns a majority of the outstanding
shares of the Common Stock of the Company and all of the
outstanding shares of Preferred Stock of the Company;
WHEREAS, Confia, S.A., Institucion de Banca Multiple,
Abaco Grupo Financiero ("Confia") an affiliated company of
Abaco, holds promissory notes of the Company in the aggregate
principal amount of $26,500,000;
WHEREAS, the Company has requested and Abaco is
willing to invest an additional $3,000,000 in the equity of the
Company;
NOW, THEREFORE, in consideration of the promises and
mutual covenants herein contained, the parties agree as follows:
1. Purchase and Sale of Shares. At the Closing (as
hereinafter defined), the Company shall issue and sell to Abaco,
and Abaco shall purchase from the Company 30 shares of Series
E, non-voting preferred stock, $0.01 par value, of the Company
as further described in Exhibit A hereto (the "Shares"). The
terms, conditions, and agreements relating to the Shares as set
forth in Exhibit A form a part of this Agreement and are binding
upon the parties.
2. Consideration and Payment. In consideration for
the Shares, Abaco shall pay the Company at the Closing by bank
check or wire transfer the aggregate amount of U.S.$3,000,000.
3. Closing. The purchase and sale of the Shares shall
take place at the offices of the Company, on November 14, 1996,
at a mutually agreeable time (the "Closing"). At the Closing, the
Company shall deliver or cause to be delivered to Abaco,
certificates evidencing the Shares, duly issued to Abaco, and any
and all other documents necessary to issue the Shares, and Abaco
shall deliver or cause to be delivered to the Company, the
purchase price as provided in Section 2.
4. Representations and Warranties of the Company.
The Company hereby represents and warrants to Abaco as follows:
A. Corporate Organization. The Company is a
corporation duly organized, validly existing and in good standing
under the laws of Delaware.
B. Capitalization. The aggregate number of
shares of capital stock which the Company is authorized to issue
is 20,000,000 shares of Common Stock, $0.09 par value,
6,645,802 of which are presently issued and outstanding and
5,000,000 shares of preferred stock, $0.01 par value, 145 of
which are issued and outstanding. The Shares have been duly
authorized and when issued and paid for in accordance with this
Agreement will be validly issued, fully-paid, and non-assessable.
The Company's agreement to take such action as required under
Section 7 to provide sufficient shares of Common Stock to allow
for conversion of the Shares pursuant to the terms provided in
Exhibit A is valid, binding, and enforceable against the Company.
Upon the issuance of shares of Common Stock upon such
conversion, such shares of Common Stock will be validly issued,
fully paid, and non-assessable.
C. Authority, Execution and Delivery. The
Company has all requisite power and authority to execute, deliver
and perform its obligations under this Agreement. The execution,
delivery and performance of this Agreement and the consummation
of the transaction contemplated hereby have been duly authorized
by all requisite corporate action on the part of the Company. This
Agreement has been duly executed and delivered by the Company
and constitutes the legal, valid and binding obligation of the
Company enforceable in accordance with its terms.
D. Financial Statements. The Company has
furnished to Abaco the financial statements for the Company as of
September 30, 1996, which statements have been prepared in
accordance with generally accepted accounting principles
consistently applied and present fairly the financial position of
the
Company as of the date thereof and the results of operations for
the periods covered thereby. The Company further represents and
warrants that there has been no material change in the financial
position of the Company since such date.
E. No Conflict. Except for the authorization of
the listing of the shares of Common Stock into which the Shares
are convertible prior to such conversion by the New York Stock
Exchange and the filing of a Certificate of Designations in respect
of the Shares with the Secretary of State of Delaware and as
contemplated by Section 7 hereof, no authorization or consent is
required in connection with the execution, delivery, or
performance of this Agreement by the Company and such
execution, delivery or performance will not conflict with or result
in a breach of the Company's charter documents or any material
instrument or agreement.
5. Representations and Warranties of Abaco. Abaco
hereby represents and warrants to the Company as follows:
A. Corporate Organization. Abaco is a Mexican
corporation, duly organized, validly existing and in good standing
under the laws of the United Mexican States.
B. No Conflict. Except for approval by
Mexican regulatory authorities, no authorization or consent is
required in connection with the execution, delivery, or
performance of this Agreement by Abaco and such execution,
delivery or performance will not conflict with or result in a
breach
of Abaco's charter documents or any material instrument or
agreement.
C. Authority, Execution and Delivery. Abaco
has all requisite corporate power and authority to execute, deliver
and perform its obligations under this Agreement. The execution,
delivery and performance of this Agreement and the consummation
of the transaction contemplated hereby have been duly authorized
by all requisite corporate action on the part of Abaco. This
Agreement has been duly executed and delivered by Abaco and
constitutes the legal, valid and binding obligation of Abaco
enforceable in accordance with its terms.
D. Investment Intent. The Shares acquired by
Abaco pursuant to this Agreement, and the shares of Common
Stock which may be acquired upon conversion of the Shares, will
be acquired by Abaco for its own account and not with a view to,
or for resale in connection with, any distribution of any of the
Shares. Abaco acknowledges that it is aware of the applicable
limitations under the Securities Act of 1933, as amended, upon the
subsequent sale of the Shares, or such common shares, as the case
may be, and that accordingly, certificates representing the Shares,
or such common shares, as the case may be, may bear an
appropriate legend.
6. Conditions to Closing. The obligations of each of
the parties to consummate the transactions contemplated by this
Agreement shall be subject to the following conditions, any or all
of which may be waived by the parties:
A. Representations and Warranties True. The
representations and warranties of the other party shall be true and
accurate in all material respects as of the date of the Closing, as
if made on such date.
B. No Litigation. There shall be no order, and
no proceeding or investigation, pending or threatened, restricting
or prohibiting the transactions contemplated by this Agreement.
C. Certificate of Designations. The Company
shall have filed a Certificate of Designations in respect of the
Shares with the Secretary of State of Delaware.
D. Mexican Regulatory Approvals. All requisite
approvals by Mexican regulatory approvals shall have been
obtained.
7. Rights Offering. The Company agrees to take all
actions necessary to commence a rights offering in accordance with
Section 6(c) and 6(f) of Exhibit A as soon as practicable after
Abaco's written demand. Upon such written demand, the
Company shall cause the stockholders of the Company to vote on
an amendment to the Company's Certificate of Incorporation
increasing its authorized shares of Common Stock to a number
sufficient to allow for the full conversion of the Shares and all
other series of Preferred Stock and any rights offering required in
connection therewith, and/or the Company shall take such other
action with the concurrence of Abaco which would allow therefor.
The Company further agrees to promptly thereafter cause such
common shares to be listed on the New York Stock Exchange.
8. Miscellaneous Provisions.
A. Amendment, Modification and Waiver. This
Agreement may be amended, modified and supplemented, in
writing only, by mutual consent of the parties hereto. No failure
on the part of any party to exercise any right, power or privilege
hereunder shall operate as a waiver.
B. Assignment. The respective rights and
obligations of the Company and Abaco under this Agreement shall
not be assignable by either the Company or Abaco without the
prior written consent of the other.
C. Counterparts. This Agreement may be
executed in two or more counterparts, each of which shall be
deemed an original, but both of which together shall constitute one
and the same instrument.
D. Entire Agreement. This Agreement
including the exhibit hereto contains the entire understanding of
the
parties hereto in respect of the subject matter contained herein.
There are no restrictions, promises, representations, warranties,
covenants, or undertakings, other than those expressly set forth or
referred to herein. This Agreement supersedes all prior
agreements and understandings between the parties with respect to
such subject matter.
E. Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the State
of Illinois.
F. Parity. The Series B, Series C, Series D,
and Series E non-voting preferred stock of the Company purchased
by Abaco shall be "Parity Stock" (as defined in the Certificate of
Designations for each such series) with respect to each other.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first above written.
ATTEST: RODMAN & RENSHAW
CAPITAL GROUP, INC.
By: /s/ Gilbert R. Ott, Jr. By: /s/ Charles W. Daggs, III
Title: Secretary Title: President
ATTEST: ABACO CASA DE
BOLSA, S.A. DE C.V.,
ABACO GRUPO
FINANCIERO
By: Jorge Palacios By: Luis Enrique Gil
Title: Secretary Title: Director of Administration
EXHIBIT A
CERTIFICATE OF DESIGNATIONS
OF
RIGHTS, PREFERENCES, PRIVILEGES AND
RESTRICTIONS
OF SERIES E NON-VOTING CONVERTIBLE PREFERRED
STOCK
OF
RODMAN & RENSHAW CAPITAL GROUP, INC.
a Delaware corporation
Charles W. Daggs, III and Gilbert R. Ott, Jr.
certify that:
A. They are the duly elected and acting President
and Corporate Secretary, respectively,
of Rodman & Renshaw Capital Group, Inc., a Delaware
corporation (the "Corporation").
B.
1 Pursuant to the authority given by the
Corporation's Certificate of Incorporation, the
Board of Directors of the Corporation has duly adopted
the following recitals and resolutions:
WHEREAS, the Certificate of Incorporation of
the Corporation provides for a
class of shares known as Preferred Stock,
consisting of five million (5,000,000)
shares issuable from time to time in one or
more series; and
WHEREAS, the Board of Directors of the
Corporation is authorized to fix by
resolution or resolutions the rights,
preferences, privileges and restrictions
granted to or imposed upon the Preferred Stock
or any series thereof; and
WHEREAS, the Board of Directors desires,
pursuant to its authority as
aforesaid, to designate thirty (30) shares of
the Preferred Stock as "Series E
Non-Voting Convertible Preferred Stock" and to
fix the rights, preferences,
privileges and restrictions relating to such
series of Preferred Stock;
NOW, THEREFORE, BE IT RESOLVED, that the Board
of Directors hereby
fixes the designation and the number of shares
constituting, and the rights,
preferences, privileges and restrictions
relating to, the Series E Non-Voting
Convertible Preferred Stock:
1 Designation. This series of Preferred
Stock shall be designated "Series
E Non-Voting Convertible Preferred Stock" (the
"Series E Preferred Stock").
2 Number of Shares and Par Value. The
number of shares constituting the
Series E Preferred Stock shall be thirty (30).
Each share of the Series E
Preferred Stock shall have a par value of one
cent ($.01).
3 Certain Definitions. Unless the context
otherwise requires, the terms
defined in this paragraph 3 shall have, for all
purposes of this resolution, the
meanings herein specified.
Common Stock. The term "Common Stock"
shall mean all shares now
or hereafter authorized of any class of Common
Stock of the Corporation and
any other stock of the Corporation, howsoever
designated, authorized after the
Issue Date, which has the right (subject always
to prior rights of any class or
series of preferred stock) to participate in
the distribution of the assets and
earnings of the Corporation without limit as to
per share amount.
Conversion Date. The term "Conversion
Date" shall have the meaning
set forth in subparagraph 6(d) below.
Conversion Price. The term "Conversion
Price" shall mean the price per
share of Common Stock used to determine the
number of shares of Common
Stock deliverable upon conversion of a share of
the Series E Preferred Stock,
which price shall be determined pursuant to
subparagraph 6(b) below, subject
to adjustment in accordance with the provisions
of subparagraph 6(g) below.
Current Market Price. The term "Current
Market Price" shall have the
meaning set forth in subparagraph 6(h) below.
Dividend Payment Date. The term "Dividend
Payment Date" shall have
the meaning set forth in subparagraph 4(a)
below.
Dividend Period. The term "Dividend
Period" shall have the meaning
set forth in subparagraph 4(a) below.
Issue Date. The term "Issue Date" shall
mean the date that shares of
Series E Preferred Stock are first issued by
the Corporation.
Junior Stock. The term "Junior Stock"
shall mean, for purposes of
paragraphs 4, 5 and 8 below, the Common Stock
and any other class or series
of stock of the Corporation issued after the
Issue Date not entitled to receive any
dividends in any Dividend Period unless all
dividends required to have been paid
or declared and set apart for payment on the
Series E Preferred Stock shall have
been so paid or declared and set apart for
payment and, for purposes of
paragraphs 5 and 8 below, any class or series
of stock of the Corporation issued
after the Issue Date not entitled to receive
any assets upon the liquidation,
dissolution or winding up of the affairs of the
Corporation until the Series E
Preferred Stock shall have received the entire
amount to which such stock is
entitled upon such liquidation, dissolution or
winding up.
Parity Stock. The term "Parity Stock"
shall mean, for purposes of
paragraphs 4, 5, 7 and 8 below, any other class
or series of stock of the
Corporation issued after the Issue Date
entitled to receive payment of dividends
on a parity with the Series E Preferred Stock
and, for purposes of paragraphs
4 and 8 below, any other class or series of
stock of the Corporation issued after
the Issue Date entitled to receive assets upon
the liquidation, dissolution or
winding up of the affairs of the Corporation on
a parity with the Series E
Preferred Stock.
Senior Stock. The term "Senior Stock"
shall mean, for purposes of
paragraphs 4, 5, 7 and 8 below, any class or
series of stock of the Corporation
issued after the Issue Date ranking senior to
the Series E Preferred Stock in
respect of the right to receive dividends, and,
for purposes of paragraphs 4 and
8 below, any class or series of stock of the
Corporation issued after the Issue
Date ranking senior to the Series E Preferred
Stock in respect of the right to
receive assets upon the liquidation,
dissolution or winding up of the affairs of
the Corporation.
Subscription Price. The term
"Subscription Price" shall mean $100,000
per share.
Subsidiary. The term "Subsidiary" shall
mean any corporation of which
shares of stock possessing at least a majority
of the general voting power in
electing the board of directors are, at the
time as of which any determination is
being made, owned by the Corporation, whether
directly or indirectly through
one or more Subsidiaries.
4. Dividends.
(a) Subject to the prior preferences and
other rights of any Senior
Stock and restrictions imposed by the terms of
any indebtedness of the
Corporation, the holders of Series E Preferred
Stock shall be entitled to receive,
out of funds legally available for the purpose,
cash dividends at a per annum
rate applied to the Subscription Price as
determined daily during each Dividend
Period equal to the then most recent "Prime
Rate," as published in The Wall
Street Journal (or any successor publication)
as the base rate on corporate U.S.
Dollar loans posted by at least 75% of the
nation's 30 largest banks (or any
publicly published comparable rate as
determined by the Board of Directors)
plus two percent per annum; such rate to change
as and when such "Prime
Rate" changes and such rate to be determined on
the basis of a 365 day year and
the actual days elapsed during a Dividend
Period. Such dividends shall be
cumulative from the Issue Date, and shall be
payable in arrears, when and as
declared by the Board of Directors, on March
31, June 30, September 30, and
December 31 of each year (each such date being
herein referred to as a
"Dividend Payment Date"), commencing on March
31, 1997. The period from
the Issue Date through March 31, 1997, and each
quarterly period between
consecutive Dividend Payment Dates thereafter
shall hereinafter be referred to
as a "Dividend Period." Each such dividend
shall be paid to the holders of
record of the Series E Preferred Stock as their
names appear on the share
register of the Corporation on the
corresponding Record Date. As used above,
the term "Record Date" means, with respect to
the dividend payment on March
31, June 30, September 30 and December 31,
respectively, of each year, the
preceding March 30, June 29, September 29 and
December 30, or such other
record date designated by the Board of
Directors of the Corporation with respect
to the dividend payable on such respective
Dividend Payment Date. Dividends
on account of arrears for any past Dividend
Periods may be declared and paid
at any time, without reference to any Dividend
Payment Date, to holders of
record on such date, not exceeding 50 days
preceding the payment date thereof,
as may be fixed by the Board of Directors. No
dividends shall be payable in
respect of any period less than a full Dividend
Period.
(b) In the event that full cash dividends
are not paid or made
available to the holders of all outstanding
shares of Series E Preferred Stock and
of any Parity Stock, and funds available shall
be insufficient to permit payment
in full in cash to all such holders of the
preferential amounts to which they are
then entitled, the entire amount available for
payment of cash dividends shall be
distributed among the holders of the Series E
Preferred Stock and of any Parity
Stock ratably in proportion to the full amount
to which they would otherwise be
respectively entitled, and any remainder not
paid in cash to the holders of the
Series E Preferred Stock shall cumulate as
provided in subparagraph 4(c) below.
(c) If, on any Dividend Payment Date, the
holders of the Series E
Preferred Stock shall not have received the
full dividends provided for in the
other provisions of this paragraph 4, then such
dividends shall cumulate,
whether or not earned or declared, with
additional dividends thereon for each
succeeding full Dividend Period during which
such dividends shall remain
unpaid. Unpaid dividends for any period less
than a full Dividend Period shall
cumulate on a day-to-day basis and shall be
computed on the basis of a 365 day
year.
(d) So long as any shares of Series E
Preferred Stock shall be
outstanding, the Corporation shall not declare
or pay on any Junior Stock any
dividend whatsoever, whether in cash, property
or otherwise (other than
dividends payable in shares of the class or
series upon which such dividends are
declared or paid, or payable in shares of
Common Stock with respect to Junior
Stock other than Common Stock, together with
cash in lieu of fractional shares),
nor shall the Corporation make any distribution
on any Junior Stock, nor shall
any monies be paid or made available for a
sinking fund for the purchase or
redemption of any Junior Stock, unless all
dividends to which the holders of
Series E Preferred Stock shall have been
entitled for all previous Dividend
Periods shall have been paid or declared and a
sum of money sufficient for the
payment thereof set apart.
5. Distributions Upon Liquidation,
Dissolution or Winding Up. In the
event of any voluntary or involuntary
liquidation, dissolution or other winding
up of the affairs of the Corporation, subject
to the prior preferences and other
rights of any Senior Stock, but before any
distribution or payment shall be made
to the holders of Junior Stock, the holders of
the Series E Preferred Stock shall
be entitled to be paid the Subscription Price
of all outstanding shares of Series
E Preferred Stock as of the date of such
liquidation or dissolution or such other
winding up, plus any accrued and unpaid
dividends thereon to such date, and
no more, in cash or in property taken at its
fair value as determined by the
Board of Directors. If such payment shall have
been made in full to the holders
of the Series E Preferred Stock, and if payment
shall have been made in full to
the holders of any Senior Stock and Parity
Stock of all amounts to which such
holders shall be entitled, the remaining assets
and funds of the Corporation shall
be distributed among the holders of Junior
Stock, according to their respective
shares and priorities. If, upon any such
liquidation, dissolution or other winding
up of the affairs of the Corporation, the net
assets of the Corporation
distributable among the holders of all
outstanding shares of the Series E
Preferred Stock and of any Parity Stock shall
be insufficient to permit the
payment in full to such holders of the
preferential amounts to which they are
entitled, then the entire net assets of the
Corporation remaining after the
distributions to holders of any Senior Stock of
the full amounts to which they
may be entitled shall be distributed among the
holders of the Series E Preferred
Stock and of any Parity Stock ratably in
proportion to the full amounts to which
they would otherwise be respectively entitled.
Neither the consolidation or
merger of the Corporation into or with another
corporation or corporations, nor
the sale of all or substantially all of the
assets of the Corporation to another
corporation or corporations shall be deemed a
liquidation, dissolution or winding
up of the affairs of the corporation within the
meaning of this paragraph 5.
6. Conversion Rights. The Series E Preferred
Stock shall be convertible
into Common Stock as follows:
(a) Conversion. Upon and after
satisfaction of the condition set forth
in subparagraph 6(c), if applicable, any
outstanding share of Series E Preferred
Stock may be converted, at the option of a
holder, at any time, in accordance
with subparagraphs 6(d) and 6(e), into fully
paid and nonassessable shares of
Common Stock.
(b) Conversion Price. The number of
shares of Common Stock into
which a share of Series E Preferred Stock shall
be converted shall be determined
by dividing (i) the sum of (A) the Subscription
Price plus (B) any dividends on
such share of Series E Preferred Stock which
such holder is entitled to receive,
but has not yet received, by (ii) the
Conversion Price in effect on the
Conversion Date. The Conversion Price at which
shares of Common Stock
shall initially be issuable upon conversion of
the shares of Series E Preferred
Stock shall be determined on a floating basis
and shall equal the book value per
share of Common Stock determined in accordance
with generally accepted
accounting principles from the Corporation's
financial records as at the close of
the full month immediately preceding the
Conversion Date, provided that: (i) if
it is not practicable to determine such book
value on a sufficiently timely basis,
then the Conversion Price shall be so
determined at the close of the full month
second preceding the Conversion Date; and (ii)
if the applicable book value per
share is less than $0.09, then the Conversion
Price shall be $.09. The
determination of book value shall be made by
the independent auditors of the
Company based on a review of the financial
records of the Company but without
an audit. The Conversion Price shall be
subject to adjustment as set forth in
subparagraph 6(g). No payment or adjustment
shall be made for any dividends
on the Common Stock issuable upon such
conversion.
(c) Conversion Condition. So long as
the New York Stock
Exchange (NYSE) stockholder approval
requirements shall be applicable,
Series E Preferred Stock shall be convertible
only to the extent that such
conversion is approved by the stockholders of
the Corporation, if so required.
No stockholder approval shall be required for
any conversion of the Series E
Preferred Stock made in connection with a
rights offering to all stockholders at
a per share cash price equal to the Conversion
Price pursuant to which the
stockholders (other than the holder of a share
of Series E Preferred Stock whose
rights to purchase shares in the offering would
be deemed exercised and
consummated by a conversion) could purchase the
number of shares proportional
to the number of shares issued upon conversion
Rights Offering.
(d) Notice of Conversion. Before a holder
shall be entitled to convert any
share of Series E Preferred Stock into shares
of Common Stock, such holder
shall give written notice to the Corporation at
the principal corporate office of
the Corporation of the election to convert such
share of Series E Preferred
Stock pursuant to subparagraph (6)(a), shall
surrender the certificate or
certificates representing such share of Series
E Preferred Stock to be converted
to the Corporation or its transfer agent, and
shall designate in writing the name
or names in which the certificate or
certificates for shares of Common Stock are
to be issued. Such conversion shall be deemed
to have been made immediately
upon the date of surrender of a share of Series
E Preferred Stock, the
Conversion Date. As promptly as practicable
after the Conversion Date, the
Corporation shall at its expense issue and
deliver to or upon the written order
of such holder a certificate or certificates
for the number of full shares of
Common Stock to which such holder is entitled
and a check or cash with respect
to any fractional interest in a share of Common
Stock as provided in
subparagraph 6(e). The person in whose name the
certificate or certificates for
Common Stock are to be issued shall be deemed
to have become a holder of
record of such Common Stock on the applicable
Conversion Date for all
purposes. If less than the entire outstanding
portion of the certificate
representing the shares of Series E Preferred
Stock held by such holder is
converted, then the Corporation at its expense
will deliver to the holder,
together with the certificate or certificates
for such Common Stock, a
replacement certificate representing the shares
of Series E Preferred Stock not
surrendered for conversion by the holder.
(e) Fractional Shares. No fractional
shares of Common Stock or
script shall be issued upon conversion of
shares of Series E Preferred Stock.
Instead of any fractional shares of Common
Stock which would otherwise be
issuable upon conversion of any shares of
Series E Preferred Stock, the
Corporation shall pay a cash adjustment in
respect of such fractional interest in
an amount equal to that fractional interest of
the then Current Market Price.
(f) Stockholder Approval/Rights Offering.
On one or more occasions,
any holder of a share of Series E Preferred
Stock may at its election require the
Corporation (i) to call a special meeting of
its stockholders as soon as
practicable after such request to approve the
conversion of any share of Series
E Preferred Stock into shares of Common Stock
in accordance with the terms
hereof, (ii) include such approval on the
agenda of the next annual meeting of
stockholders, (iii) conduct a Rights Offering
as soon as practicable after such
request and/or in any such case to promptly
cause the shares issued upon
conversion to be listed on the NYSE. In the
case of clauses (i) or (ii) above,
a holder of Series E Preferred Stock who also
holds shares of Common Stock
shall vote and shall cause all affiliated
persons or entities to vote all shares of
the Corporation held by it or them for such
approval. In the event that any
shares of Series E Preferred Stock are
converted and clause (iii) is not elected
in connection therewith, a Rights Offering will
be made within one year after
the conversion of any share of Series E
Preferred Stock to the stockholders of
record at the time of such Rights Offering at
a price per share equal to the
Conversion Price used in such conversion.
(g) Conversion Price Adjustments. The
Conversion Price shall be
subject to adjustment from time to time as
follows:
(i) Consolidation, Merger, Sale,
Lease or Conveyance.
In case of any consolidation with or merger of
the Corporation with or into
another corporation, or in case of any sale,
lease or conveyance to another
corporation of the assets of the Corporation as
an entirety or substantially as an
entirety, each share of Series E Preferred
Stock shall after the date of such
consolidation, merger, sale, lease or
conveyance be convertible into the number
of shares of stock or other securities or
property (including cash) to which the
Common Stock issuable (at the time of such
consolidation, merger, sale, lease
or conveyance) upon conversion of such share of
Series E Preferred Stock
would have been entitled upon such
consolidation, merger, sale, lease or
conveyance; and in any such case, if necessary,
the provisions set forth herein
with respect to the rights and interests
thereafter of the holders of the shares of
Series E Preferred stock shall be appropriately
adjusted so as to be applicable,
as nearly as may reasonably be possible, to any
shares of stock or other
securities or property thereafter deliverable
on the conversion of the shares of
Series E Preferred Stock.
(ii) Rounding of Calculations;
Minimum Adjustment. All
calculations under this subparagraph (g) shall
be made to the nearest cent or to
the nearest one hundredth (1/100th) of a share,
as the case may be. Any
provision of this paragraph 6 to the contrary
notwithstanding, no adjustment in
the Conversion Price shall be made if the
amount of such adjustment would be
less than $0.01, but any such amount shall be
carried forward and an adjustment
with respect thereto shall be made at the time
of and together with any
subsequent adjustment which, together with such
amount and any other amount
or amounts so carried forward, shall aggregate
$0.01 or more.
(iii) Timing of Issuance of
Additional Common Stock Upon
Certain Adjustments. In any case in which the
provisions of this
subparagraph (g) shall require that an
adjustment shall become effective
immediately after a record date for an event,
the Corporation may defer until
the occurrence of such event (A) issuing to the
holder of any share of Series E
Preferred Stock converted after such record
date and before the occurrence of
such event the additional shares of Common
Stock issuable upon such
conversion by reason of the adjustment required
by such event over and above
the shares of Common Stock issuable upon such
conversion before giving effect
to such adjustment and (B) paying to such
holder any amount of cash in lieu of
a fractional share of Common Stock pursuant to
subparagraph (e) of this
paragraph 6; provided that the Corporation upon
request shall deliver to such
holder a due bill or other appropriate
instrument evidencing such holder's right
to receive such additional shares, and such
cash, upon the occurrence of the
event requiring such adjustment.
(h) Current Market Price. The Current
Market Price at any date
shall mean, in the event the Common Stock is
publicly traded, the average of
the daily closing prices per share of Common
Stock for 30 consecutive trading
days ending no more than 15 business days
before such date (as adjusted for any
stock dividend, split, combination or
reclassification that took effect during such
30 business day period). The closing price for
each day shall be the last
reported sale price regular way or, in case no
such reported sale takes place on
such day, the average of the last closing bid
and asked prices regular way, in
either case on the principal national
securities exchange on which the Common
Stock is listed or admitted to trading, or if
not listed or admitted to trading on
any national securities exchange, the closing
sale price for such day reported by
NASDAQ, if the Common Stock is traded
over-the-counter and quoted in the
National Market System, or if the Common Stock
is so traded, but not so
quoted, the average of the closing reported bid
and asked prices of the Common
Stock as reported by NASDAQ or any comparable
system or, if the Common
Stock is not listed on NASDAQ or any comparable
system, the average of the
closing bid and asked prices as furnished by
two members of the National
Association of Securities Dealers, Inc.
selected from time to time by the
Corporation for that purpose. If the Common
Stock is not traded in such
manner that the quotations referred to above
are available for the period
required hereunder, Current Market Price per
share of Common Stock shall be
deemed to be the fair value as determined by
the Board of Directors,
irrespective of any accounting treatment.
(i) Statement Regarding Adjustments.
Whenever the Conversion
Price shall be adjusted as provided in
subparagraph 6(g), the Corporation shall
forthwith file, at the office of any transfer
agent for the Series E Preferred Stock
and at the principal office of the Corporation,
a statement showing in detail the
facts requiring such adjustment and the
Conversion Price that shall be in effect
after such adjustment, and the Corporation
shall also cause a copy of such
statement to be sent by mail, first class
postage prepaid, to each holder of shares
of Series E Preferred Stock at its address
appearing on the Corporation's
records.
(j) Costs. The Corporation shall pay all
documentary, stamp,
transfer or other transactional taxes
attributable to the issuance or delivery of
shares of Common Stock upon conversion of any
shares of Series E Preferred
Stock; provided that the Corporation shall not
be required to pay any taxes
which may be payable in respect of any transfer
involved in the issuance or
delivery of any certificate for such shares in
a name other than that of the holder
of the shares of Series E Preferred Stock in
respect of which such shares are
being issued.
(k) Reservation of Shares. The
Corporation shall reserve at all times
so long as any shares of Series E Preferred
Stock remain outstanding, free from
preemptive rights, out of its treasury stock
(if applicable) or its authorized but
unissued shares of Common Stock, or both,
solely for the purpose of effecting
the conversion of the shares of Series E
Preferred Stock, sufficient shares of
Common Stock to provide for the conversion of
all outstanding shares of Series
E Preferred Stock.
(l) Approvals. If any shares of Common
Stock to be reserved for
the purpose of conversion of shares of Series
E Preferred Stock require
registration with or approval of any
governmental authority under any federal
or state law before such shares may be validly
issued or delivered upon
conversion, then the Corporation will in good
faith and as expeditiously as
possible endeavor to secure such registration
or approval, as the case may be.
If, and so long as, any Common Stock into which
the shares of Series E
Preferred Stock are then convertible is listed
on any national securities
exchange, the Corporation will,
contemporaneously with the conversion, cause
to be listed and thereafter to keep listed on
such exchange, upon official notice
of issuance, all shares of such Common Stock
issuable upon conversion.
(m) Valid Issuance. All shares of Common
Stock which may be
issued upon conversion of the shares of Series
E Preferred Stock will upon
issuance by the Corporation be duly and validly
issued, fully paid and
nonassessable and free from all taxes, liens
and charges with respect to the
issuance thereof, and the Corporation shall
take no action which will cause a
contrary result (including without limitation,
any action which would cause the
Conversion Price to be less than the par value,
if any, of the Common Stock).
7. Voting Rights.
(a) The holders of the issued and
outstanding shares of Series E
Preferred Stock have no voting rights except as
set forth herein and as required
by law.
(b) Without the consent of the holders of
at least
(i) a majority of the shares of
Series E Preferred Stock
then outstanding, given in writing or by vote
at a meeting of holders of Series
E Preferred Stock called for such purpose, the
Corporation will not (A) increase
the authorized amount of Series E Preferred
Stock or (B) create any other class
of Parity Stock or Senior Stock or increase the
authorized amount of any such
other class; and
(ii) a majority of the shares of
Series E Preferred Stock
then outstanding, given in writing or by vote
at a meeting of holders of Series
E Preferred Stock called for such purpose, the
Corporation will not (A) other
than as set forth in (i) above, amend, alter or
repeal any provision of the
Certificate of Incorporation or this
Certificate so as to adversely affect the
rights, preferences or privileges of the Series
E Preferred Stock or (B) merge
or consolidate with or into any other person,
or sell substantially all of its assets
or business to any other person, except that
the Corporation may merge with
any person if the Corporation is the entity
surviving such merger and such
merger does not adversely affect the rights,
preferences and privileges of the
Series E Preferred Stock.
8. Covenants. In addition to any other
rights provided by law, so long as
any Series E Preferred Stock is outstanding,
the Corporation, without first
obtaining the affirmative vote or written
consent of the holders of not less than
a majority of such outstanding shares of Series
E Preferred Stock, will not:
(a) amend or repeal any provision of, or
add any provision to, the
Corporation's Certificate of Incorporation or
By-Laws or to these resolutions if
such action would alter adversely or change the
preferences, rights, privileges
or powers of, or the restrictions provided for
the benefit of, any Series E
Preferred Stock, or increase or decrease the
number of shares of Series E
Preferred Stock authorized hereby;
(b) authorize or issue shares of any
class or series of stock not
expressly authorized herein having any
preference or priority as to dividends,
assets or other rights superior to or on a
parity with any such preference or
priority of the Series E Preferred Stock, or
authorize or issue shares of stock of
any class or any bonds, debentures, notes or
other obligations convertible into
or exchangeable for, or having option rights to
purchase, any shares of stock of
the Corporation having any preference or
priority as to dividends, assets or
other rights superior to or on a parity with
any such preference or priority of
the Series E Preferred Stock;
(c) reclassify any class or series of any
Junior Stock into Parity Stock
or Senior Stock or reclassify any series of
Parity Stock into Senior Stock; or
(d) pay or declare any dividend on any
Junior Stock (other than
dividends payable in shares of the class or
series upon which such dividends are
declared or paid, or payable in shares of
Common Stock with respect to Junior
Stock other than Common Stock, together with
cash in lieu of fractional shares
and dividends not in excess of dividends paid
to the Series E Preferred Stock)
while the Series E Preferred Stock remains
outstanding, or apply any of its
assets to the redemption, retirement, purchase
or acquisition, directly or
indirectly, through subsidiaries or otherwise,
of any Junior Stock, except from
employees of the Corporation upon termination
of employment or otherwise
pursuant to the terms of stock purchase or
option agreements providing for the
repurchase of, or right of first refusal with
respect to, such Junior Stock entered
into with such employees.
9. Exclusion of Other Rights. Except as may
otherwise be required by law,
the Series E Preferred Stock shall not have any
preferences or relative,
participating, optional or other special
rights, other than those specifically set
forth in this resolution (as such resolution
may be amended from time to time)
and in the Corporation's Certificate of
Incorporation. The shares of Series E
Preferred Stock shall have no preemptive or
subscription rights. The Series E
Preferred Stock shall not be subject to
redemption or the operation of a
retirement or sinking fund.
10. Headings of Subdivisions. The headings of
the various subdivisions
hereof are for convenience of reference only
and shall not affect the
interpretation of any of the provisions hereof.
11. Severability of Provisions. If any right,
preference or limitation of the
Series E Preferred Stock set forth in this
resolution (as such resolution may be
amended from time to time) is invalid, unlawful
or incapable of being enforced
by reason of any rule of law or public policy,
all other rights, preferences and
limitations set forth in this resolution (as so
amended) which can be given effect
without the invalid, unlawful or unenforceable
right, preference or limitation
shall, nevertheless, remain in full force and
effect, and no right, preference or
limitation herein set forth shall be deemed
dependent upon any other such right,
preference or limitation unless so expressed
herein.
12. Status of Reacquired Shares. Shares of
Series E Preferred Stock which
have been issued and converted or reacquired in
any manner shall (upon
compliance with any applicable provisions of
the laws of the State of Delaware)
have the status of authorized and unissued
shares of Preferred Stock issuable in
series undesignated as to series and may be
redesignated and reissued.
C. The authorized number of shares of Preferred
Stock of the Corporation is 5,000,000
and the number of shares constituting the Series E
Non-Voting Convertible Preferred Stock, consisting
of the shares authorized hereby, is 30.<PAGE>
IN WITNESS WHEREOF, the undersigned have executed
this certificate as of November 14,
1996, on behalf of the Corporation, and certify under
penalty of perjury that this is the act and deed
of the Corporation, and that the facts stated herein are
true.
By:
---------------------------
Charles W. Daggs, III
President
By:
--------------------------
Gilbert R. Ott, Jr.
Secretary
